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Moody's confirms U.S. triple-A rating, outlook negative

08-03-2011 08:17 BJT

NEW YORK, Aug. 2 (Xinhua) -- Moody's Investors Service confirmed its triple-A government bond rating for the United States on Tuesday but added to it a negative outlook.

In its statement released hours after U.S. President Barack Obama signed a debt-limit extension deal into law, Moody's said the initial increase of the debt limit by 900 billion dollars and the commitment to raise it by a further 1.2-1.5 trillion dollars by year end have virtually eliminated the risk of a default, prompting the confirmation of the rating at Aaa.

"Today's agreement is a first step toward achieving the long- term fiscal consolidation needed to maintain the U.S. government debt metrics within Aaa parameters over the long run," said the rating agency.

However, Moody's also warned that a downgrade is possible if there is a weakening in fiscal discipline in the coming year, or further fiscal consolidation measures are not adopted in 2013.

Besides, significant deterioration in the economic outlook and an appreciable rise in the U.S. government's funding costs can also lead to a future downgrade in the rating.

The Moody's move came immediately after another major rating agency Fitch Ratings confirmed its AAA rating for U.S. debt over the short-term, but warned of more tough choices coming soon.

Editor:Wang Xiaomei |Source: Xinhua

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