Memo to Congress: Those rumblings about default aren’t just “scare tactics.” Moody’s, one of the two leading ratings agencies, says it’s putting the United States on a review for a possible downgrade of its perfect Aaa bond rating, saying it’s concerned that the debt ceiling might not be raised. “There is a small but rising risk of a short-lived default,” the agency says. A lowered credit rating would force the government to pay higher interest rates on its debt. Some politicians have argued that the U.S. could avoid default by prioritizing payments to bondholders, but the Moody’s move suggests otherwise.
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