“The U.S. is the only large AAA rated country that saw its
debt rise during the crisis that until recently had no plan that
would reverse the trend, Steven Hess, senior credit officer at
Moody’s, said last week.”
Wire: BLOOMBERG News (BN) Date: Apr 18 2011 8:36:30
Standard & Poor’s Puts ‘Negative’ Outlook on U.S. AAA (1)
By Robert Burgess
April 18 (Bloomberg) -- Standard & Poor’s put a
“negative” outlook on the U.S. AAA credit rating, citing
rising budget deficits and debt.
“We believe there is a material risk that U.S. policy
makers might not reach an agreement on how to address medium-and
long-term budgetary challenges by 2013,” New York-based S&P
said in a report today. “If an agreement is not reached and
meaningful implementation does not begin by then, this would in
our view render the U.S. fiscal profile meaningfully weaker than
that of peer ‘AAA’ sovereigns.”
Under President Barack Obama’s fiscal year 2012 budget,
released in February, the total debt subject to the ceiling
would be $20.8 trillion in 2016. The plan House Republicans
approved April 15, written by Budget Committee Chairman Paul
Ryan, would need a debt ceiling of at least $19.5 trillion,
according to data compiled by Bloomberg Government.
Treasuries fell, reversing earlier gains, after S&P lowered
its outlook to negative from stable. The benchmark 10-year note
yielded as much as 3.45 percent in New York before trading
little changed at 3.43 percent. The dollar dropped 0.7 percent
to 82.58 yen and pared its gain versus the euro. The S&P 500
Index fell 1.5 percent.
The Treasury Department projected that the government may
reach the $14.3 trillion debt ceiling limit as soon as mid-May
and run out of options for avoiding default by early July.
Last week, Moody’s Investors Service said Obama’s plan to
cut $4 trillion in cumulative deficits within 12 years may be a
“positive” for the nation’s credit quality and mark a reversal
in the budget debate.
The U.S. is the only large AAA rated country that saw its
debt rise during the crisis that until recently had no plan that
would reverse the trend, Steven Hess, senior credit officer at
Moody’s, said last week.
No comments:
Post a Comment