Moody's Reminds Investors US Rating at Risk

While Treasury bonds were steady on the Moody's update on US credit-rating outlook, the release reminds investors again that political gridlock is the main threat to the nation's triple-A rating. Unlike S&P which downgraded the US to AA+ last year, Moody's still keeps US at AAA though with a negative outlook. The report signals that the US could be cut without a deal to lower the debt/GDP ratio as early as 2013--a case that would potentially erode foreign investors' confidence on dollar assets. On the other hand, Moody's signals that if a deal is reached to stabilize the deficit woes, Moody's will affirm AAA rating and move the outlook back to stable. The 10-year note is flat in price to yield 1.682%. 

Moody's Reminds Investors US Rating at Risk

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