BRACE YOURSELF: Moody's Basically Just Threatened To Downgrade The US

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A day after S&P downgraded Japan’s debt, the attention turns to the US.

Bloomberg cites a new Moody’s note:

“Although no rating action is contemplated at this time, the time frame for possible future actions appears to be shortening, and the probability of assigning a negative outlook in the coming two years is rising,” wrote Steven Hess, a senior credit officer in New York and the author of the report. The rating remains “stable,” according to the report.

What’s really surprising here is that there is an imminent threat of default in the US, which is the debt ceiling drama. Surely that warrants some kind of warning, no? Surely that’s a bigger threat than the notion that the US might run out of its own dollars.

Apparently Moody’s doesn’t think so. Anyway, even if it does happen, we doubt that it’s going to be a big deal.

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