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RegisterFitch says U.S. Can issue more debt than other AAA nations
Fitch says U.S. Can issue more debt than other AAA nations
by Guest Fri Aug 19, 2011 4:35 pm
Fitch says U.S. Can issue more debt than other AAA nations
By Bloomberg News
The U.S. is able to issue and support more debt than other
AAA-rated sovereign borrowers because of the dollar's status as the
world's main reserve currency and its diversified economy, Fitch Ratings
said.
Fitch's view of the U.S.'s top credit rating, which it
affirmed Aug. 16, rebuts Standard & Poor's decision on Aug. 5 to
downgrade the nation to AA+ from AAA. S&P said lawmakers failed to
cut spending enough to reduce record deficits. Moody's Investors Service
affirmed its top U.S. ranking last week.
“Leaving aside arguments about debt dynamics, the U.S.'s relative
wealth and productivity, and political will, the U.S. is anything but
just another sovereign,” Fitch analysts Jeremy Carter and Alex Griffiths
wrote today in a report. “The pre- eminence of the U.S. dollar as the
global reserve currency means the U.S. government effectively has first
call on excess global savings and supports low real interest rates.”
Since New York-based S&P cut its rating on the U.S., the
yield on the Treasury 10-year note has dropped to a record low 1.97
percent. It was 3.33 percent in January and averaged 4.04 percent over
the past decade. The security is a benchmark for everything from home
mortgages to car loans. Treasuries are on pace in August for the biggest
monthly gain since December 2008.
U.S. Has Time
“The dollar's status as the world's reserve currency means the
sovereign is not exposed to any serious liquidity risk,” London-based
Griffiths and Carter wrote.
“The lack of liquidity risk gives the U.S.
time to resolve its issues -- but it is unquestionable that it needs a
credible plan to reduce its debt if it is to retain its AAA rating in
the medium term.”
Marketable U.S. government debt outstanding has risen to
$9.4 trillion, from $4.34 trillion in mid-2007, as the government
borrowed to bail out the nation's banking system and lift the economy
out of recession. The U.S. went from budget surpluses averaging $139.7
billion from 1998 through 2001 to a deficit of $1.29 trillion last year,
Bloomberg data show.
The U.S. may be placed on negative outlook, indicating more
than a 50 percent probability the nation will be downgraded in the next
two years, should weaker-than-estimated growth or a failure by a
congressional committee to enact $1.2 trillion in budget cuts under a
plan reached this month cause debt levels to rise more than estimated,
Fitch said on Aug. 16 in a statement.
http://www.dailyherald.com/article/20110818/business/708189881/
By Bloomberg News
The U.S. is able to issue and support more debt than other
AAA-rated sovereign borrowers because of the dollar's status as the
world's main reserve currency and its diversified economy, Fitch Ratings
said.
Fitch's view of the U.S.'s top credit rating, which it
affirmed Aug. 16, rebuts Standard & Poor's decision on Aug. 5 to
downgrade the nation to AA+ from AAA. S&P said lawmakers failed to
cut spending enough to reduce record deficits. Moody's Investors Service
affirmed its top U.S. ranking last week.
“Leaving aside arguments about debt dynamics, the U.S.'s relative
wealth and productivity, and political will, the U.S. is anything but
just another sovereign,” Fitch analysts Jeremy Carter and Alex Griffiths
wrote today in a report. “The pre- eminence of the U.S. dollar as the
global reserve currency means the U.S. government effectively has first
call on excess global savings and supports low real interest rates.”
Since New York-based S&P cut its rating on the U.S., the
yield on the Treasury 10-year note has dropped to a record low 1.97
percent. It was 3.33 percent in January and averaged 4.04 percent over
the past decade. The security is a benchmark for everything from home
mortgages to car loans. Treasuries are on pace in August for the biggest
monthly gain since December 2008.
U.S. Has Time
“The dollar's status as the world's reserve currency means the
sovereign is not exposed to any serious liquidity risk,” London-based
Griffiths and Carter wrote.
“The lack of liquidity risk gives the U.S.
time to resolve its issues -- but it is unquestionable that it needs a
credible plan to reduce its debt if it is to retain its AAA rating in
the medium term.”
Marketable U.S. government debt outstanding has risen to
$9.4 trillion, from $4.34 trillion in mid-2007, as the government
borrowed to bail out the nation's banking system and lift the economy
out of recession. The U.S. went from budget surpluses averaging $139.7
billion from 1998 through 2001 to a deficit of $1.29 trillion last year,
Bloomberg data show.
The U.S. may be placed on negative outlook, indicating more
than a 50 percent probability the nation will be downgraded in the next
two years, should weaker-than-estimated growth or a failure by a
congressional committee to enact $1.2 trillion in budget cuts under a
plan reached this month cause debt levels to rise more than estimated,
Fitch said on Aug. 16 in a statement.
http://www.dailyherald.com/article/20110818/business/708189881/
Guest- Guest
Re: Fitch says U.S. Can issue more debt than other AAA nations
by Guest Fri Aug 19, 2011 4:41 pm
AA AAA ????
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