Zero Hedge — "Credit Negative For U.S. Government": Moody's Threatens Downgrade If Trump Tax Plan Is Passed

Moody's goes all proactive.

As various institutions continue to publish very detailed estimates of how Trump's tax plan will impact the federal budget, which is somewhat amazing since income brackets haven't even been assigned yet, Moody's published a note today threatening to finally strip the U.S. of its AAA credit rating if the tax plan is ultimately passed as currently contemplated....

The deficit would be too big. Gotta cut some welfare.

Zero Hedge
"Credit Negative For U.S. Government": Moody's Threatens Downgrade If Trump Tax Plan Is Passed

Tyler Durden

Last summer I said a U.S. credit downgrade would NOT result in higher rates!

I did this interview prior to the S&P downgrade of the U.S. last summer and I said that a downgrade WOULD NOT RESULT IN HIGHER U.S. INTEREST RATES!

Moody's gets moody

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)

Moody's Warns United States Must Stay Serious About Deficit Reduction

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.

Moody's says US rating may be cut if debt limit not raised

Moody’s finally realizes that “willingness to pay” is as important a factor in credit rating as “ability to pay.” The U.S. has no hindrance on its ability to pay, but it has shown a definite willingness to not pay with the debt limit shenanigans.

Moody’s Says U.S. May Be Cut If No Progress on Debt Limit By John Detrixhe and Heidi Przybyla June 2 (Bloomberg) -- Moody’s Investors Service said it will put the U.S. government’s Aaa credit rating under review for a downgrade unless there’s progress on increasing the debt limit by mid-July. “The heightened polarization over the debt limit has increased the odds of a short-lived default,” New York-based Moody’s said in a statement today. “If this situation remains unchanged in coming weeks, Moody’s will place the rating under review.”