Moody's Investors Service on Wednesday warned that its top credit rating for the United States could be in jeopardy if lawmakers backtrack on $1.2 trillion in deficit cuts planned over 10 years.
The ratings firm said the failure of a U.S. congressional committee to reach an agreement on deficit reduction did not affect the Aaa rating, but any pullback from agreed automatic cuts to take effect starting in 2013 could prompt it to take action.
"While a change in the composition of the spending cuts would not be a major rating consideration, a reduction in the total amount that would increase the projected increase in federal debt over the coming decade could have negative rating implications," Moody's said in a statement.
Read the rest at The Huffington Post (Reuters article)
Someone wake up the bond vigilantes and tell them that Moodys is concerned.
Hello, yields are hitting historical lows.
I sure hope the folks at the rating agencies don't trade bonds. Or maybe they do and are sowing disinformation. Pathetic. Looks like they are spending so much time over at Zero Hedge they are unable to distinguish reality anymore.