Jim Sinclair’s Commentary
Moody’s will downgrade the USA? Sounds like Moody’s management and the Wiki guy will be sharing a cell, maybe for the same crime.
US tax cuts may cause negative rating outlook-Moody’s
14:47, Monday 13 December 2010
NEW YORK (Xetra: A0DKRK – news) , Dec 13 (Reuters) – A U.S. tax and unemployment-benefit package agreed to by President Barack Obama and Republican leaders last week will increase the likelihood of a negative outlook on the U.S. Aaa rating in the next two years, Moody’s Investors Service said.
U.S. Treasury bond prices fell in volatile trade last week after the announcement of the deal, in part due to concerns over the effect the package will have on government debt levels.
"From a credit perspective, the negative effects on government finance are likely to outweigh the positive effects of higher economic growth," Moody’s analyst Steven Hess said in a report sent late on Sunday.
If the bill becomes law, it will "adversely affect the federal government budget deficit and debt level," Moody’s said.
A negative outlook would indicate that the rating may be more likely to be cut from the top Aaa rating over the following 12 to 18 months. The United States currently has a stable outlook, indicating a rating change is not anticipated over this time frame.
