Moody's Warns US to Strike Deal on Debt Limit

It threatens to downgrade nation's triple-A credit rating
By John Johnson,  Newser Staff
Posted Jun 2, 2011 6:23 PM CDT

(Newser) – Moody's is getting antsy over the lack of progress on a deal to raise the debt limit and cut the deficit, reports the Washington Post. It warned today that it will consider lowering the nation's credit rating unless a deal emerges by mid-July, citing a "very small but rising risk of a short-lived default." The agency blames political obstinance: “Although Moody’s fully expected political wrangling prior to an increase in the statutory debt limit, the degree of entrenchment into conflicting positions has exceeded expectation."

story continues below

The New York Times calls the move "unexpected" and is giving it serious play. MarketWatch, on the hand, sees it as a "mild warning"—in fact, more of a "warning about issuing a warning." Writes Steve Schaefer at Forbes: "Anyone that was waiting on a ratings agency action to realize that the U.S. is in troubling fiscal shape, or who thinks that such action will suddenly strike up a desire for compromise on Capitol Hill, probably has bigger troubles." (Read more Moody's stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.