Leaviss: America's prized AAA credit rating 'not untouchable'

M&G's Jim Leaviss has warned against taking the US' prized AAA rating for granted as the country continues to inject stimulus and defy current European policies of debt reduction.

Leaviss, the M&G head of retail fixed income, says yesterday's surprise move to further stimulate the US economy has heightened fears for its longer term credit quality. Treasuries dropped sharply over the stimulus move which could add $1trn to the US debt burden, with the benchmark 10-year yield rising 11bp to 3.23%. The short end of the curve has also been hit hard, with the 2-year yield climbing 6bp to 0.6%. "We thought the US had really hit what people call the zero bound, where they had no more real room to move on fiscal policy," Leaviss says. "The market knew they were going...