Investors who are interested in 30-year Treasury bond futures can take heart from a recent report by Moody’s indicating that the U.S. is in little danger of losing its AAA credit rating in the short term.
However, a Reuters report recently quoted the report as a rapidly rising ratio of debt to gross domestic product that is “deteriorating sharply,” while also noting that the U.S. will likely have a higher ratio than other countries with the highest credit ratings.
Despite the long-term fiscal problems that could be on the horizon, U.S. officials have long dismissed the idea that the country’s credit rating will suffer or that the government will eventually default on its debt obligations – a scenario that would have serious implications for markets around the world.
Other recent media reports have noted that barring significant action against the U.S. budget deficit, the country’s credit rating is likely to come under considerable pressure by the end of the next decade.
For now though, investors can remain reasonably confident in the stability of investing in U.S. Treasury bonds.
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