Moody’s Alters US Credit Outlook Amid Rising National Debt and Political Disagreements
The credit agency Moody’s has recently revised the United States credit outlook from 'stable' to 'negative'. This decision reflects concerns over persistent large fiscal deficits and diminishing debt affordability. The change in outlook comes at a time when the nation is facing heightened fiscal scrutiny due to rising national debt levels and political disagreements, which hinder consensus on budgetary management.
Moody's remarks echo investor concerns about the direction of U.S. economic policy and the potential for legislative stalemate over budget and deficit strategies. Investors are apprehensive about federal spending and political discord, which has led to a previous downgrade by Fitch and now Moody's revision.
Moody’s senior vice president, William Foster, stated that any significant policy response to address the declining fiscal strength is unlikely to happen until 2025 due to the political calendar next year. This implies that the United States may not take immediate action to address the concerns raised by Moody's.
Biden Administration Challenges Moody’s Revised Outlook
The Biden administration is challenging Moody’s revised outlook, emphasizing the alleged strength of the U.S. economy and the government's dedication to enduring fiscal health. However, Moody's assessment has reverberated into the political sphere, increasing scrutiny on Biden's team as they navigate through a complex fiscal environment.
Recent polls show former President Donald Trump ahead of President Joe Biden in crucial swing states, adding further pressure on the Biden administration to address the concerns raised by Moody's and regain investor confidence.
Moody’s Credit Assessment and Federal Reserve’s Policy Actions
Moody’s credit assessment closely follows a hawkish speech by Fed Chairman Jerome Powell in Washington, where he expressed doubts about the adequacy of the Federal Reserve's policy actions. This indicates a broader concern about the overall economic stability and the impact it may have on the creditworthiness of the United States.
The Treasury Department, represented by Deputy Treasury Secretary Wally Adeyemo, disagrees with Moody's latest revision. Adeyemo stated, "While the statement by Moody’s maintains the United States' Aaa rating, we disagree with the shift to a negative outlook. The American economy remains strong, and Treasury securities are the world's preeminent safe and liquid asset."
Despite Adeyemo's remarks, the government's recent 30-year Treasury auction performed poorly, with investors describing the bid-to-cover ratio and the yield concession as disappointing. White House spokeswoman Karine Jean-Pierre attributed Moody's downgrade to congressional Republican extremism and dysfunction.
Conclusion
The credit agency Moody's downgrade of the United States credit outlook to 'negative' has sparked debate and concern among investors, the Biden administration, and the general public. The revision reflects worries about persistent fiscal deficits and diminishing debt affordability. While the Biden administration challenges Moody's assessment and emphasizes the strength of the U.S. economy, the government faces increasing scrutiny and pressure to address these concerns and regain investor confidence.
What are your thoughts on Moody's downgrade of the U.S. credit score to 'negative'? Share your opinions in the comments section below.
Frequently Asked Questions
Which precious metals are best to invest in retirement?
The best precious metal investments are gold and silver. They are both simple to purchase and sell, and they have been around for a long time. Consider adding them to the list if you're looking to diversify and expand your portfolio.
Gold: One of the oldest forms of currency, gold, is one of mankind's most valuable. It is very stable and secure. Because of this, it is considered a great way of preserving wealth during times when there are uncertainties.
Silver: Silver has been a favorite among investors for years. This is a great choice for people who want to avoid volatility. Silver, unlike gold, tends not to go down but up.
Platinum: This precious metal is also becoming more popular. Like gold and silver, it's very durable and resistant to corrosion. It's however much more costly than any of its counterparts.
Rhodium: The catalytic converters use Rhodium. It's also used in jewelry making. It is also quite affordable compared with other types of precious metals.
Palladium: Palladium has a similarity to platinum but is more rare. It's also much more affordable. It's a popular choice for investors who want to add precious metals into their portfolios.
Are gold investments a good idea for an IRA?
Any person looking to save money is well-served by gold. It is also an excellent way to diversify you portfolio. There's more to gold that meets the eye.
It's been used throughout history as a currency, and even today, it remains a popular form of payment. It's often referred to as “the world's oldest currency.”
But gold is mined from the earth, unlike paper currencies that governments create. This makes it highly valuable as it is hard and rare to produce.
The price of gold fluctuates based on supply and demand. The strength of the economy means people spend more, and so, there is less demand for gold. The result is that gold's value increases.
On the other hand, people will save cash when the economy slows and not spend it. This leads to more gold being produced which decreases its value.
This is why it makes sense to invest in gold for individuals and companies. You'll reap the benefits of investing in gold when the economy grows.
Also, your investments will earn you interest which can help increase your wealth. In addition, you won’t lose any money if gold falls in value.
How Do You Make a Withdrawal from a Precious Metal IRA?
First, determine if you would like to withdraw money directly from an IRA. Then make sure you have enough cash to cover any fees or penalties that may come with withdrawing funds from your retirement plan.
If you are willing to pay a penalty for early withdrawal, you should consider opening a taxable brokerage account instead of an IRA. This option is also available if you are willing to pay taxes on the amount you withdraw.
Next, figure out how much money will be taken out of your IRA. This calculation will depend on many factors including your age at the time of withdrawal, how long the account has been in your possession, and whether you plan to continue contributing towards your retirement plan.
Once you know how much of your total savings to convert to cash, it's time to choose the type of IRA that you want. While traditional IRAs are tax-free, Roth IRAs can be withdrawn at any time after you reach 59 1/2. However, Roth IRAs will charge income taxes upfront and allow you to access your earnings later without additional taxes.
Once the calculations have been completed, it's time to open a brokerage accounts. A majority of brokers offer free signup bonuses, as well as other promotions, to get people to open accounts. Avoid unnecessary fees by opening an account with your debit card, rather than your credit card.
When it's time to make withdrawals from your precious-metal IRA, you'll need a place to keep your coins safe. Some storage areas will accept bullion, while others require you to purchase individual coins. Before choosing one, consider the pros and disadvantages of each.
Bullion bars are easier to store than individual coins. You will need to count each coin individually. However, keeping individual coins in a separate place allows you to easily track their values.
Some prefer to store their coins in a vault. Others prefer to place them in safe deposit boxes. Whatever method you choose to store your bullion, you should ensure it is safe and secure so you can enjoy its many benefits for many years.
Statistics
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
External Links
cftc.gov
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Legal – WSJ
investopedia.com
finance.yahoo.com
How To
Gold IRAs are a growing trend
The gold IRA trend is growing as investors seek ways to diversify their portfolios while protecting against inflation and other risks.
Owners of the gold IRA can use it to invest in physical bars and bullion gold. It can be used for tax-free growth and provides an alternative investment option for those concerned about stocks and bonds.
A gold IRA allows investors the freedom to manage their wealth without worrying about volatility in the markets. They can also use the gold IRA as a protection against potential problems like inflation.
Physical gold is also a great investment option, as it has unique properties like durability, portability, divisibility, and portability.
Additionally, the gold IRA has many benefits. It allows you to quickly transfer your gold ownership to your heirs. The IRS doesn't consider gold a commodity or currency.
Investors who seek financial stability and a safe haven are finding the gold IRA increasingly attractive.
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By: Jamie Redman
Title: Moody’s Downgrades US Credit Outlook to ‘Negative’ Amid Concerns Over Fiscal Deficits and Political Discord
Sourced From: news.bitcoin.com/moodys-downgrades-us-credit-rating-to-negative-on-fiscal-deficits-and-debt-concerns/
Published Date: Sat, 11 Nov 2023 17:30:33 +0000
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