Moody’s puts US government on notice

Ratings agency, Moody’s Investors Service, issued a warning to US government officials that the nation’s sovereign rating will be at risk if the debt limit on treasury financing is not lifted. A bill that would raise the US debt limit by US$2.4 trillion failed to win house passage on 31 May.

Treasury Secretary, Timothy Geithner, has warned of the hike in borrowing costs if the house fails to raise the
debt ceiling by 2 August. Yields on 10-year Treasuries climbed to 3.04% from 3.01% before the Moody’s
announcement and a six-month low of 2.94% yesterday.

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