Rating agency Moody’s expects the U.S. government will continue to pay its debts on time, but public statements from lawmakers during the debt ceiling negotiations could prompt a change in its assessments before a potential default, a senior analyst said.
Investors use credit ratings as one of the metrics to establish the risk profiles of governments and companies.
Generally, the lower a borrower’s rating, the higher its funding costs. That means a possible U.S. government rating downgrade could affect the pricing of trillions of dollars of Treasury debt securities.
Read More : Possible Rating Action Looms as U.S. Debt Talks Exhibit Change in Tone, says Moody’s