Moody’s may downgrade US AAA debt rating
Ratings agency Moody’s has warned it may lower the US triple-A debt rating if lawmakers fail to reach an agreement to lift the Government’s borrowing limit.
The warning comes as the Obama administration and Congress continue tense negotiations over making budget cuts before approval is given to raise the limit.
President Obama needs the Republican lawmakers and Democratic-held Senate to agree to a deal to close the US deficit, while allowing Washington to borrow past the deadline of August 2.
Moody’s warning comes shortly after International Monetary Fund (IMF) said a deal needs to be signed off with regard to the country’s debt or it could result in a downgrade to the country’s debt rating.
In a statement, Moody’s said: “The review of the US government’s bond rating is prompted by the possibility that the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes.”