Tags: Moodys | Deficit | Bond | Rating

Moody's: Huge Deficit Endangers U.S. Bond Rating

Wednesday, 03 Feb 2010 07:41 AM

Moody's Investors Service said that unless the U.S. government makes more moves to decrease the budget deficit or the economy improves more than anticipated, the government's "Aaa" bond rating will eventually be put under pressure.

In a statement Tuesday, the rating service said that the $3.8 trillion budget outline released Monday "was a small start to the big task of returning to a sustainable debt trajectory, but further measures will be necessary if that task is to be accomplished."

The budget includes a proposed three-year freeze on spending beginning in 2011 for many domestic government agencies in an effort to save money —  something Moody's senior credit officer Steven Hess called a "positive step."

Still, "the deficits projected in the budget do not stabilize debt levels in relation to GDP, and the portion of government expenditures going to pay interest on the debt shows a steady rise," he said.


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Moody's Investors Service said that unless the U.S. government makes more moves to decrease the budget deficit or the economy improves more than anticipated, the government's Aaa bond rating will eventually be put under pressure. In a statement Tuesday, the rating...
Moodys,Deficit,Bond,Rating
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2010-41-03
Wednesday, 03 Feb 2010 07:41 AM
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