Moody's keeps U.S. AAA rating, but with a caveat or two


No one in his or her right mind really thinks that the United States will lose its "AAA" rating. The U.S. economy is still the world's largest with a GDP of over $14 trillion. The deficit may be rising, but if the recession ends soon, consumer and business spending should rebound. The demand for Treasury paper remains strong and the largest purchasers, especially China, have indicated they are still ready buyers.

Moody's reaffirmed its "AAA" rating on U.S. debt but added a caveat or two. According to Reuters, the future risks the Treasury faces could change fairly fast. A Moody's official told the news agency, "That will happen for two reasons. Either our assumptions in terms of debt reversibility prove to be wrong. That is, in fact the U.S. government is unable to bring public debt back to a downward trajectory," or if the United States' ability to raise a large amount of debt at a low cost were to be put at risk.

Originally published