14 Jul 2011

Moody's says US debt rating under review

1:07 pm on 14 July 2011

Moody's has put the United States under review, with the possibility of a downgrade in the country's AAA status.

Moody's is the first of the big three rating agencies to do so, which means it is close to cutting the rating.

In a statement, Moody's says it sees a rising possibility that the statutory debt limit will not be raised soon enough, leading to a default on US Treasury debt obligations.

Federal Reserve chairman Ben Bernanke said earlier that a default would send shockwaves through the entire financial system.

The BBC reports the United States hit its debt ceiling of $US14.3 trillion on 16 May. Republican party members refuse to lift the ceiling without deep government spending cuts.