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<ul class="summary-list"><li>The CSI 300 Index hit fresh four-year lows Tuesday, trading at its lowest since February 2019. </li><li>The stock moves followed Moody's downgrade of China's credit outlook.</li></ul>China's benchmark <a href="https://markets.businessinsider.com/index/csi-300">CSI 300</a> stock index tumbled 1.9% to fresh four-year lows Tuesday, hitting its lowest level since February 2019 following Moody's downgrade of the country's credit outlook.The index has lost 12% year-to-date. The <a href="https://markets.businessinsider.com/index/hang_seng">Hang Seng China Enterprises Index</a> also declined 1.6% Tuesday to its lowest since November 2022. The MSCI China index fell more than 2% to its lowest since November 2022. The stock sell-off comes as investors fear further weakening of the world's second largest economy after <a href="https://www.businessinsider.com/china-economy-debt-crisis-moodys-bonds-evergrande-stock-market-analysis-2023-12">Moody's lowered its outlook for China's sovereign bond rating</a> from stable to negative, highlighting the <a href="https://www.businessinsider.com/china-economy-deflation-markets-property-real-estate-housing-beijing-2023-8">economic turmoil facing the country.</a>Moody's pointed to Beijing's use of fiscal stimulus to prop up local governments — the country's on track for <a href="https://asia.nikkei.com/Spotlight/Caixin/Five-things-to-know-about-China-s-unusual-sovereign-bond-issue#:~:text=The%20Chinese%20government%20took%20a,a%20record%20high%20of%203.8%25." target="_blank" rel="noopener">record bond issuance in 2023</a> — and a worsening real estate crisis as risks to stability. Chinese officials said they were "disappointed" with the downgrade, and that the country would remain resilient. Since officials lifted China's zero-COVID policies, the country's rebound has been a disappointment. A slate of headwinds have materialized, including declining foreign trade, <a href="https://markets.businessinsider.com/news/bonds/china-economy-country-garden-defaults-property-real-estate-bonds-dollar-2023-10">highly indebted property developers</a>, deflation, demographic challenges, and <a href="https://www.businessinsider.com/china-housing-market-economy-japan-jpmorgan-financial-investors-geopolitics-demographics-2023-8">risks of "Japanification,"</a> as JPMorgan strategists said in a note in August.Data released last week showed China's manufacturing and services activities contracted in November, and the readings reinforced the government's case to prop up the economy with further fiscal stimulus. "The outlook change also reflects the increased risks related to structurally and persistently lower medium-term economic growth and the ongoing downsizing of the property sector," the ratings agency said.In August, Chinese officials had <a href="https://www.businessinsider.com/china-economy-recession-inflation-deflation-fdi-growth-beijing-xi-jinping-2023-8" rel="">urged economists not to portray data unfavorably</a>, the Financial Times reported, and to instead "interpret bad news from a positive light."

China stocks tumble as Moody's outlook downgrade deepens investors' economic fears

<ul class="summary-list"><li>US stocks fell on Monday as traders took in Moody's outlook for the US credit rating.</li><li>The agency downgraded its outlook from "stable" to "negative" as concerns over the US debt build.</li></ul>US stocks fell on Monday as investors took in Moody's US credit rating outlook and looked ahead to fresh inflation data coming out on Tuesday.On Friday, Moody's Investors Service cut its outlook for the US credit rating from "stable" to "negative," signaling that a downgrade to the current AAA rating is possible. "In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues, Moody's expects that the US' fiscal deficits will remain very large, significantly weakening debt affordability," the ratings agency said. "Continued political polarization within US Congress raises the risk that successive governments will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability."Investors also have their eye on the upcoming consumer price index for October, which will roll out Tuesday morning. Headline inflation is expected to have slowed to 3.28% year over year, from September's pace of 3.7%.Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Monday: <ul><li><a href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">S&amp;P 500</a>: 4,403.34, down 0.27%</li></ul><ul><li><a href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Dow Jones Industrial Average</a>: 34,231.26, down 0.15% (51.84 points)</li></ul><ul><li><a href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Nasdaq Composite</a>: 13,744.07, down 0.39%</li></ul>Here's what else is going on today: <ul><li><a href="https://markets.businessinsider.com/news/stocks/elon-musk-spacex-starlink-half-trillion-dollars-investor-ron-baron-2023-11">Elon Musk's SpaceX will be worth half a trillion dollars by 2030</a>, according to billionaire investor Ron Baron.</li><li><a href="https://markets.businessinsider.com/news/stocks/tesla-stock-elon-musk-warren-buffett-investing-ev-berkshire-valuation-2023-11">Warren Buffett should have invested in Tesla</a> when it was worth just 0.1% as much, Elon Musk said.</li></ul>In commodities, bonds, and crypto: <ul><li><a href="https://markets.businessinsider.com/commodities/oil-price">West Texas Intermediate</a> crude oil edged higher 0.10% to $77.25 a barrel. <a href="https://markets.businessinsider.com/commodities/oil-price">Brent crude</a>, the international benchmark, ticked up 0.05% to $81.48 a barrel. </li><li><a href="https://markets.businessinsider.com/commodities/gold-price">Gold</a> slipped 0.17% to $1,933.83 per ounce. </li><li>The 10-year Treasury yield rose five basis points to 4.678%.</li><li><a href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> dipped 0.76% to $36,869. </li></ul>

US stocks drop as investors assess Moody's outlook and brace for October inflation data

Credit rating agency Moody's Investors Service on Tuesday said it has withdrawn <keyword id="10924914" type="General" weightage="50" keywordseo="kalyan-jewellers-india-limited" source="Orion">Kalyan Jewellers India Limited</keyword>'s (KJIL) B2 long-term corporate family rating. The rating outlook prior to withdrawal was stable. "In view of the current market conditions, the company has pushed back its plans to access the international debt capital markets. Moody's has decided to withdraw the rating for its own business reasons," Moody's said. The Rs 9,056 crore revenue <keyword id="413856" type="General" weightage="80" keywordseo="kalyan-jewellers" source="Orion">Kalyan Jewellers</keyword> is the second-largest jewelry company in India. It also has operations in the <keyword id="30350" type="General" weightage="50" keywordseo="middle-east" source="Orion">Middle East</keyword>. The <keyword id="203261" type="General" weightage="50" keywordseo="kalyanaraman" source="Orion">Kalyanaraman</keyword> family (promoter family) and associated companies own 60.53 per cent of Kalyan Jewellers. <keyword id="15035127" type="General" weightage="50" keywordseo="highdell-investments-ltd" source="Orion">Highdell Investments Ltd</keyword>, an affiliate of private equity firm Warburg Pincus &amp; Company US LLC, has a direct stake of 26.36 per cent, said Moody's. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/sustainability/news/the-first-annual-breakthrough-agenda-reports-sets-out-priorities-to-rapidly-make-more-clean-technologies/articleshow/94321918.cms">The first annual breakthrough agenda reports sets out priorities to rapidly make more clean technologies</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/rally-in-banking-stocks-continue-as-credit-growth-picks-margins-get-a-boost/articleshow/94324519.cms">Rally in banking stocks continue as credit growth picks &amp; margins get a boost</a>

Moody's withdraws rating of Kalyan Jewellers

New Delhi, Mar 28 (PTI) Petrol price on Monday was hiked by 30 paise a litre and diesel by 35 paise, taking the total increase in rates in the last one week to Rs 4-4.10 per litre. Petrol in Delhi will now cost Rs 99.41 per litre as against Rs 99.11 previously while diesel rates have gone up from Rs 90.42 per litre to Rs 90.77, according to a price notification of state fuel retailers. Rates have been increased across the country and vary from state to state depending upon the incidence of local taxation. This is the sixth increase in prices since the ending of a four-and-half-month long hiatus in rate revision on March 22. In the first four four occasions, prices were increased by 80 paise a litre - the steepest single-day rise since the daily price revision was introduced in June 2017. On Sunday, petrol price went up by 50 paise a litre and diesel by 55 paise. In all, petrol prices have gone up by Rs 4 per litre and diesel by Rs 4.10. Prices had been on a freeze since November 4 ahead of the assembly elections in states like <keyword id="6357713" type="General" weightage="80" keywordseo="uttar-pradesh" source="Orion">Uttar Pradesh</keyword> and Punjab -- a period during which the cost of raw material (crude oil) soared by about USD 30 per barrel. The rate revision was expected soon after counting of votes on March 10 but it was put off by a couple of weeks. The increase in retail price warranted from crude oil prices rising during the 137 day hiatus from around USD 82 per barrel to USD 120 is huge but state-owned fuel retailers <keyword id="6356834" type="General" weightage="80" keywordseo="indian-oil-corporation" source="Orion">Indian Oil Corporation</keyword> (IOC), <keyword id="155363" type="General" weightage="80" keywordseo="bharat-petroleum-corporation-ltd" source="Orion">Bharat Petroleum Corporation Ltd</keyword> (BPCL) and <keyword id="500127" type="General" weightage="80" keywordseo="hindustan-petroleum-corporation-ltd" source="Orion">Hindustan Petroleum Corporation Ltd</keyword> (HPCL) are passing on the required increase in stages. Moody's Investors Services last week stated that state retailers together lost around USD 2.25 billion (Rs 19,000 crore) in revenue for keeping petrol and diesel prices on hold during the election period. Oil companies "will need to raise diesel prices by Rs 13.1-24.9 per litre and Rs 10.6-22.3 a litre on gasoline (petrol) at an underlying crude price of USD 100-120 per barrel," according to Kotak Institutional Equities. CRISIL Research said a Rs 9-12 per litre increase in retail price will be required for a full pass-through of an average USD 100 per barrel crude oil and Rs 15-20 a litre hike if the average crude oil price rises to USD 110-120. India is 85 per cent dependent on imports for meeting its oil needs and so retail rates adjust accordingly to the global movement. PTI ANZ RUP SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/politics/india/news/two-day-bharat-bandh-essential-services-likely-to-be-affected/articleshow/90486188.cms">Two-day Bharat Bandh: Essential services likely to be affected</a> <a href="https://www.businessinsider.in/business/startups/news/how-this-former-vedantu-cofounder-is-taking-on-instagram-and-snapchat-to-build-social-media-for-teens/articleshow/90443442.cms">How this former Vedantu cofounder is taking on Instagram and Snapchat to build social media for teens</a>

Petrol, diesel prices hiked for the sixth time in two weeks

The <keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>'s decision to tighten norms for unsecured <keyword id="35520" type="General" weightage="20" keywordseo="personal-loans" source="Orion">personal loans</keyword> is credit positive because lenders will need to allocate higher capital for such loans, thus improving their loss-absorbing buffers, <keyword id="6462970" type="General" weightage="20" keywordseo="moodys" source="Orion">Moody's</keyword> Investors Service said on Monday. The Reserve Bank last week raised risk weights on unsecured retail loans, credit cards and lending to non-banking finance companies (NBFCs) by 25 percentage points. Moody's said <keyword id="586043" type="General" weightage="20" keywordseo="unsecured-loans" source="Orion">unsecured loans</keyword> have been growing rapidly in the past few years, exposing financial institutions to a potential spike in credit costs in case of sudden economic or interest rate shocks. "The tightening of underwriting norms through higher risk-weighted assets is credit positive because lenders will need to allocate higher capitals for such loans improving their loss-absorbing buffers and may dampen their growth appetite," Moody's said in a statement. It said that over the past few years, India's unsecured lending segment has become very competitive, with banks, NBFCs and financial technology (fintech) companies, including several new entrants, aggressively growing loans in this category. In the past two years, personal loans grew around 24 per cent and credit card loans rose 28 per cent on an average compared with the overall banking sector's credit growth of around 15 per cent, Moody's said. "We expect banks would be able to absorb higher risk weights on their capital because the overall banking sector's exposure to unsecured retail credit is small at around 10 per cent of loans as of September 2023 and the sector's overall capitalization is at historically high levels with a Common Equity Tier 1 ratio of 13.9 per cent as of March 2023," Moody's said. However, the impact of the new underwriting rules could vary among individual lenders depending on their exposure to unsecured loans, it added. Last week, US-based S&amp;P Global Ratings had said that the RBI's decision to tighten norms for unsecured consumer credit is likely to hit banks' capital adequacy by 60 basis points. The move could lead to higher lending rates, lower credit growth and increase the need for capital raising among weak lenders, it added.

Higher risk weight on unsecured bank loans credit positive: Moody's

<ul class="summary-list"><li>Moody's Investors Service slashed its outlook for Chinese government bonds to negative on Tuesday.</li><li>The credit-rating agency cited stagnant growth and the country's ongoing property crisis.</li></ul>Moody's Investors Service slashed its outlook for China's credit rating on Tuesday, dealing a fresh blow to the world's second-largest economy.The credit-rating agency said in a <a href="https://www.moodys.com/research/Moodys-affirms-Chinas-A1-rating-changes-outlook-to-negative-from--PR_481753?cy=can&amp;lang=en" target="_blank" rel="noopener">statement</a> that it would maintain its A1 grade for Chinese government bonds, but cut its outlook from "stable" to "negative."Moody's cited <a href="https://www.businessinsider.com/china-economy-crash-recession-growth-retail-sales-inflation-deflation-covid-2023-7">stagnant growth</a> and a seemingly <a href="https://www.businessinsider.com/country-garden-china-real-estate-problems-explainer-evergrande-2023-8">never-ending property crisis</a> as factors that could hamper Beijing's ability to repay its debts."The outlook change also reflects the increased risks related to structurally and persistently lower medium-term economic growth and the ongoing downsizing of the property sector," the ratings agency said.China has struggled to kickstart its economy in 2023 after three years of harsh zero-COVID lockdowns, with growth figures coming in below forecasters' expectations.Moody's said it expects the country's Gross Domestic Product (GDP) to expand just 4% in 2024 and 2025, and then to rise by 3.8% on average the rest of the decade.Policymakers have also <a href="https://www.businessinsider.com/housing-market-house-prices-real-estate-china-economy-world-recession-2023-11">struggled to contain</a> a property crisis that's left two massive real-estate developers – <a href="https://markets.businessinsider.com/news/egrnq">Evergrande</a> and <a href="https://markets.businessinsider.com/news/ctryf-stock">Country Garden</a> – on the brink of collapse after they failed to make bond repayments.Read more: <a href="https://www.businessinsider.com/housing-market-house-prices-real-estate-china-economy-world-recession-2023-11">Real estate made China rich. Now it's looking more like kryptonite.</a>Beijing has responded to those crises by rolling out fiscal-stimulus packages and upping its borrowing, with its budget deficits now at the highest level in more than 30 years, while local governments have also taken on more debt.China's Ministry of Finance hit back at Moody's. It said in a <a href="https://www.mof.gov.cn/zhengwuxinxi/caizhengxinwen/202312/t20231205_3919789.htm" target="_blank" rel="noopener">statement</a> that it was "disappointed" about the grader cutting its outlook, adding that the economy "will be highly resilient and has large potential," per translations from <a href="https://www.bloomberg.com/news/articles/2023-12-05/moody-s-cuts-china-credit-outlook-to-negative-on-rising-debt" target="_blank" rel="noopener">Bloomberg</a>.The <a href="https://markets.businessinsider.com/currencies/usd-cny">Chinese yuan</a> traded flat against the dollar Tuesday. It's fallen by over 3% against the greenback this year.Meanwhile, China's flagship stock-market index, the <a href="https://markets.businessinsider.com/index/csi-300">CSI 300</a>, had dropped just under 2% by the closing bell, extending its total losses for 2023 to over 12%.

China's battered economy suffers another blow as Moody's slashes its credit outlook

<ul class="summary-list"><li>Moody's lowered its outlook for the US's credit rating to negative Friday.</li><li>It flagged political polarization and the government's mountain of debt as economic threats.</li></ul>Moody's Investors Service dropped a potential bombshell Friday, with Treasury-bond markets still in a state of turmoil.The agency slashed its outlook for the US's credit rating from "stable" to "negative", pointing to economic risks including <a href="https://markets.businessinsider.com/news/stocks/stock-market-charts-crash-federal-reserve-interest-rates-bonds-crypto-2023-6">high interest rates</a>, the government's <a href="https://markets.businessinsider.com/news/bonds/bond-market-crash-government-debt-ceiling-crisis-wall-street-deficit-2023-10">steadily-growing debt pile</a>, and <a href="https://www.businessinsider.com/what-happens-debt-ceiling-default-crisis-solution-isnt-clear-2023-5">political polarization</a> in Washington.Here's what you need to know.<h2>Negative credit outlook</h2>Moody's cut its <a href="https://markets.businessinsider.com/news/bonds/bond-market-crash-us-treasurys-safe-haven-asset-debt-default-2023-11">outlook for the US's credit rating</a> to negative Friday. That's not the same as a full-on downgrade, but it does signal to investors that it's on the brink of becoming less sure about the government's ability to repay its debts.Fellow "Big Three" agency <a href="https://www.businessinsider.com/fitch-downgrades-us-credit-rating-deficit-debt-ceiling-2023-8">Fitch</a> slashed its own credit rating for the US from the top-tier AAA to AA+ in August, while Standard &amp; Poor's controversially <a href="https://www.cnbc.com/2023/09/27/former-sp-ratings-chair-us-is-weaker-now-than-when-we-downgraded-in-2011.html" target="_blank" rel="noopener">did the same</a> back in 2011 after lawmakers narrowly avoided a default.Moody's said that three factors had led to its outlook souring:<ul><li>Rising interest rates: The Federal Reserve has jacked up rates from near-zero to around 5.5% since March 2022, in a bid to clamp down on inflation. That means the government is dealing with higher borrowing costs.</li></ul><ul><li>The US's deficit: The US's debt pile is likely to "remain very large", per Moody's. The deficit now stands at a staggering $33.7 trillion, according to the <a href="https://fiscaldata.treasury.gov/datasets/historical-debt-outstanding/historical-debt-outstanding" target="_blank" rel="noopener">Treasury Department</a>, meaning it dwarfs the combined size of the Chinese, Japanese, German, Indian, and British economies.</li><li>Political deadlocks: In May, the government narrowly avoided a catastrophic default after Congress reached an <a href="https://www.businessinsider.com/joe-biden-kevin-mccarthy-reach-us-debt-ceiling-deal-2023-5">11th-hour deal</a> to raise the debt ceiling. Brinkmanship will likely continue to prevent lawmakers from reaching an agreement to cut down on borrowing, Moody's said.</li></ul>The Biden administration hit back immediately on that last point, with White House press secretary Karine Jean-Pierre saying "Republican extremism and dysfunction" had led to the shift in the ratings agency's outlook.<h2>Bond-market reaction</h2>Moody's disclosed its weaker outlook at a time when <a href="https://markets.businessinsider.com/news/bonds/bond-market-crash-jpmorgan-bank-of-america-unrealized-losses-explainer-2023-11?_gl=1*kz7jbd*_ga*MzIwMDc0OTgxLjE2OTE2NTg2NjM.*_ga_E21CV80ZCZ*MTY5OTg2NjMwMy4xOTIuMS4xNjk5ODc2NzAwLjYwLjAuMA..">Wall Street is still reeling</a> from one of <a href="https://markets.businessinsider.com/news/bonds/treasury-bond-yields-market-selloff-market-crashes-dot-com-bubble-2023-10">the worst routs in bond-market history</a>.Prices of longer-duration US Treasurys have collapsed by over 40% since the onset of the pandemic, while key yields topped 5% for the first time in 16 years last month.By stoking up worries about the government's massive debt pile, Moody's threatened to make a bad week worse – but the market reaction to it slashing its outlook has so far been muted. Benchmark <a href="https://markets.businessinsider.com/rates/u-s--rates-10-years">10-year yields</a> ticked up just 3 basis points Friday in limited Veterans Day trading, before softening early Monday.Analysts instead highlighted the potential longer-term impact of the credit-outlook cut, which could set the stage for a future downgrade that might recenter the US's $33 trillion debt pile as an area of concern."Moody's downgrade of the US credit rating outlook from stable to negative refocuses concern about yawning fiscal deficits and political intractability in Washington," Hargreaves Lansdown head of money and markets Susannah Streeter said Monday."The shot across the bows at lawmakers helped nudge the yield on 10 and 30-year Treasuries up again, highlighting investors lack of confidence of an easing of budgetary pressures any time soon," she added.Investors' eyes will now turn to <a href="https://www.bls.gov/schedule/news_release/cpi.htm" target="_blank" rel="noopener">Tuesday's October Consumer Price Index report</a>, which will show how the Fed is faring in its ongoing battle to bring inflation down to 2%.

Moody's just reignited concerns about the US debt mountain. Here's what that means for the troubled Treasury-bond market.

Global credit rating agency Moody's Investors Service on Friday said that 2022 saw a spike in the annual sovereign bond defaults with seven countries defaulting on repayments. In 2023, there were two sovereign defaults - Argentina and Mozambique. In a report, Moody's said the year 2022 saw the highest number of defaults since 1983. "Seven sovereigns defaulted during the year, namely <keyword id="6360719" type="General" weightage="50" keywordseo="mali" source="Orion">Mali</keyword> (Caa2 stable), Russia (rating withdrawn), Sri Lanka (Ca stable), Belarus (Ca negative), El Salvador (Caa3 stable), Ukraine (Ca stable) and <keyword id="60252" type="General" weightage="50" keywordseo="ghana" source="Orion">Ghana</keyword> (Ca stable)," the report states. "The annual sovereign bond default rate jumped to nearly 5 per cent in 2022, more than five times the average default rate in 1983-2022. There have been two defaults, by the governments of Argentina (Ca stable) and Mozambique (Caa2 positive), in 2023 to date," Moody's said. As more emerging and frontier market sovereigns face credit stress amid a tightening monetary environment post-pandemic, the share of Caa-C-rated sovereigns has increased, said <keyword id="2552053" type="General" weightage="50" keywordseo="claire-li" source="Orion">Claire Li</keyword>, Vice President <keyword id="191571" type="General" weightage="50" keywordseo="senior-analyst" source="Orion">Senior Analyst</keyword>, Credit Strategy and Research. According to Li, a growing share of sovereign ratings at the lower end of the rating distribution signals elevated default risk. "Economies with significant financing requirements that are heavily dependent on external funding and holding a considerable amount of foreign currency-denominated public debt, with low foreign exchange reserves, are among the most vulnerable," she added. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/nclt-grants-90-days-extension-to-future-retail-for-concluding-insolvency/articleshow/99489275.cms">NCLT grants 90 days extension to Future Retail for concluding insolvency</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/space/news/scientists-launch-juice-mission-to-explore-jupiters-icy-moons/articleshow/99489290.cms">Scientists launch JUICE mission to explore Jupiter's icy moons</a>

Highest sovereign defaults in 2022, two in 2023: Moody's

<ul class="summary-list"><li>A government shutdown would be "credit negative" for the US debt rating, Moody's warned Monday.</li><li>A shutdown would highlight how political polarization is weakening fiscal policymaking, it said.</li></ul>A government shutdown would be "credit negative" for the US debt rating, <a href="https://www.moodys.com/research/Political-Risks-US-FAQ-Potential-credit-implications-of-a-government-Sector-In-Depth--PBC_1382084" target="_blank" rel="noopener">Moody's Investors Service warned</a> on Monday.The credit rating agency, which is the last major outfit that still gives the US a top score, highlighted how political dysfunction is a burden on the country's financial wellbeing.While a shutdown wouldn't impact debt service payments, "it would underscore the weakness of US institutional and governance strength relative to other Aaa-rated sovereigns that we have highlighted in recent years," Moody's explained.Meanwhile, an extended shutdown would be disruptive to the US economy and financial markets, with potential negative ramifications for debt affordability, it added.And coming just months after the brinkmanship over the US debt ceiling, "a government shutdown would demonstrate the significant constraints that intensifying political polarization continue to put on US fiscal policymaking during a period of declining fiscal strength, driven by persistent fiscal deficits and deteriorating debt affordability," Moody's said. If US lawmakers don't agree on a spending bill for the next fiscal year, which starts October 1, the government will shut down this weekend.The statement from Moody's echoed the sentiment from Fitch Ratings earlier this year. Although the US avoided a catastrophic default on its debt over the summer, the <a href="https://www.businessinsider.com/fitch-downgrades-us-credit-rating-deficit-debt-ceiling-2023-8">debt ceiling fight prompted Fitch to downgrade the country's credit</a>."In Fitch's view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025," the agency said.Moody's also noted that <a href="https://markets.businessinsider.com/news/bonds/us-debt-interest-payments-federal-budget-deficit-social-security-medicare-2023-9">US debt service costs</a>, which are rising due to higher interest rates and debt, mean the government will have less fiscal flexibility.And mobilizing enough political support to pass a comprehensive plan for tackling the explosion in deficits via entitlement reform and increased revenue "appears extremely difficult in the current highly polarized political environment," it said."Looking ahead, weaker fiscal policymaking that leads to persistently high fiscal deficits and higher-than-expected interest costs would put pressure on the US rating or outlook," Moody's warned.

You Searched For "moody s investors services" and got 9 results

China stocks tumble as Moody's outlook downgrade deepens investors' economic fears

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US stocks drop as investors assess Moody's outlook and brace for October inflation data

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Moody's withdraws rating of Kalyan Jewellers

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Petrol, diesel prices hiked for the sixth time in two weeks

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Higher risk weight on unsecured bank loans credit positive: Moody's

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China's battered economy suffers another blow as Moody's slashes its credit outlook

George Glover

Moody's just reignited concerns about the US debt mountain. Here's what that means for the troubled Treasury-bond market.

George Glover

Highest sovereign defaults in 2022, two in 2023: Moody's

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Moody's warns government shutdown would be negative for US debt rating as it would highlight weak governance

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