Failure to raise debt ceiling would not mean US default – Moody’s

FXStreet (Mumbai) – The rating agency Moody’s on Monday said a failure on the part of the US government to raise its debt ceiling before the Treasury has exhausted the “extraordinary measures” does not mean that the US is about to default on its debt.

“Even if the debt limit is not raised, we believe the government will order its payment priorities to allow the Treasury to continue servicing its debt obligations,” says Moody’s Senior Vice President Steven Hess.

However, the risk that Congress will fail to raise the debt limit in time to prevent this scenario is small, Moody’s says in a report entitled “Debt Limit Deadline Next Week Does Not Imply Debt Default.”

US Treasury Secretary Jacob Lew earlier this month said the government will have exhausted the measures in place to fund the government by, or around, November 3.

The rating agency Moody’s on Monday said a failure on the part of the US government to raise its debt ceiling before the Treasury has exhausted the “extraordinary measures” does not mean that the US is about to default on its debt.

(Market News Provided by FXstreet)