Moody's Warns of Potential Future U.S. Downgrade

The ratings agency says there is still time for the government to tackle the possibility of a downgrade before 2013

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Unlike Standard & Poors, fellow credit rating agency Moody's is content this second with merely issuing threats to downgrade the United States to a less-than-pristine AA credit rating. On Monday morning, Reuters reports, "Moody's is willing to give the government more time tackle its debt problems."  But, they add, "Moody's repeated a warning on Monday it could downgrade the United States before 2013 if the fiscal or economic outlook weakens significantly." Moody analyst Steven Hess wrote in his report that "it is early to conclude that such measures [addressing a long-term fiscal situation] will not be forthcoming." The sentiment seems like what the Treasury Department and Timothy Geithner were hoping to hear from S&P last week. Last night, Geithner told CNBC that the S&P downgrade showed "really terrible judgment."

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