Moody's: US faces downgrade unless debt ceiling raised

Moody's Investors Service last night said if there is no progress in the US on increasing the country's statutory debt limit, it expects to place that government's rating under review for possible downgrade in the next few weeks.

The rating agency said it would take the action due to the "very small but rising risk" of a short-lived default. If the US debt limit is raised and default avoided, it will keep its Aaa rating. However, Moody's outlook for the country will depend on the outcome of negotiations on deficit reduction, it said. Lack of such an agreement could prompt the ratings agency to change its outlook to negative on the Aaa rating, Moody's said. "Failure to reach an agreement as part of the current negotiations would increase the likelihood of a negative outlook in the near term. At present, t...