A Moody's Downgrade Could Sink Treasury Rates
Moody's Investors Service, which still gives the U.S. Treasury the gilt-edged rating of Aaa, warned that unless Congress can "produce a stabilization and then downward trend in the ratio of federal debt to GDP" during the 2013 legislative session, the U.S. would be downgraded to Aa1.
This is notable on a few levels. Fixed-income pros have had the potential for another U.S. ratings downgrade in mind for some time, but there were varying views as to what would precipitate it. Two clear risks for a downgrade this year or in early 2013 are the prospect of skirting the sequester with some sort or legislative shell game and brinksmanship over the debt ceiling....487 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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