Reply #19: Moody's sounds note of caution while Bernanke promises support for US economy (QE3) [View All]

Source: The Guardian

Ratings agency Moody's warned it might strip the US of its AAA rating just hours after the Federal Reserve chairman, Ben Bernanke, was poised to inject further funds into the US economy and commit to several years of low interest rates to combat flagging growth and prevent further rises in the unemployment rate.

Bernanke said a third round of quantitative easing, called QE3, could be necessary if the economy fails to regain momentum in the second half of the year.

Moody's said it will review the federal government's triple-A bond rating because the White House and Congress are running out of time to raise the nation's $14.3tn borrowing limit and avoid a default. The US treasury says the government will default on its debt if the limit is not raised by 2 August.

Moody's said: "An actual default, regardless of duration, would fundamentally alter Moody's assessment of the timeliness of future payments."

Read more: http://www.guardian.co.uk/business/2011/jul/13/bernanke-ready-for-more-quantitative-easing