Hondurans Ana Morazan, left, and her boyfriend Fredi Juarez, walk back to a migrant shelter Thursday, June 30, 2022, in the border city of Tijuana, Mexico. (AP Photo/Gregory Bull)
a top-tier “Aaa” rating. The Dow Jones Industrial Average added 137 points, or 0.3%, and the Nasdaq composite inched up by less than 0.`%.Moody’s pointed to how the U.S. government continues to borrow more and more money to pay for its expenses, with political bickering making it difficult to either
in order to get its ballooning debt under more control.They’re serious problems, but nothing Moody’s said is new, and critics have been railing against Washington’s inability to control its debt for many years. Standard & Poor’s lowered its credit rating for the U.S. government in 2011.Because the issues are so well known already, investors have likely already accounted for them, according to Brian Rehling, head of global fixed income strategy and other analysts at Wells Fargo Investment Institute. They’re expecting “limited additional market impact” following the initial reactions to the Moody’s move.
Stocks and U.S. government bond prices at first fell sharply early in Monday’s trading, but they trimmed their losses as the day progressed. The S&P 500 went from a loss of 1.1% to a modest gain of 0.2% before drifting through the afternoon.The move by Moody’s essentially warns investors globally not to lend to the U.S. government at such low interest rates, and the yield on the 10-year Treasury briefly jumped above 4.55% early Monday morning. That number shows how much in interest the U.S. government has to pay in order to borrow money for 10 years, and it was up sharply from 4.43% late Friday. But it later regressed to 4.45% as more calm returned to the market.
The yield on a 30-year Treasury bond briefly leaped above 5% before likewise receding, up from less than 4% in September.
The downgrade by Moody’s comes ahead of a tense period for Washington, where it’s set to debateMunadiroh sits outside her home in Mondoliko, Central Java, Indonesia, Monday, Aug. 1, 2022. (AP Photo/Dita Alangkara)
Water-damaged books lay drying on the elevated wooden terrace of Munadiroh’s home, while a floating white tub used to transport items in the water is tethered nearby. With no land left in the village, two chickens rustle in a tree nearby, causing the only audible noise in the entire village.The village has gotten quiet since nearly every family left due to constant flooding. Even the local mosque, where Munadroh’s husband served as a cleric, has stopped the trademark calls to prayer that would usually play five times a day.
With no other home or financial resources to move, Munadiroh and her family stay in the village. Her child, grade-school age, makes the long journey to school by wading through the water and riding in a boat several times a week. Sometimes the home still floods, and Munadiroh says she keeps working to dry as many things as she can in the sunlight each day.Sudarto stands at the door of his flooded home as his daughter Turiah looks on at their flooded house in Timbulsloko, Central Java, Indonesia, Sunday, July 31, 2022. (AP Photo/Dita Alangkara)