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Moody's Warns Washington - USA Credit Rating At Risk Over Trump Tax Cuts
01-10-2018, 06:39 PM,
#1
Moody's Warns Washington - USA Credit Rating At Risk Over Trump Tax Cuts
Moody's Warns Washington - USA Credit Rating At Risk Over Trump Tax Cuts

<p>Moody's is the first of the major ratings agencies to venture some commentary on the impact of Trump tax reform on the US credit rating.</p>

<p>In an ironic twist, on the same day as Chinese officials, reviewing the nation’s foreign-exchange holdings have recommended slowing or halting purchases of U.S. Treasuries, <strong>Moody's warns that US tax cuts are seen as a credit negative for the USA Sovereign rating</strong>.</p>

<p>As Bloomberg reported:<em><strong> U.S. TAX CUTS SEEN AS CREDIT NEGATIVE FOR SOVEREIGN BY MOODY'S</strong></em></p>

<p> </p>

<p><em><strong><a href="https://www.zerohedge.com/sites/default/files/inline-images/20180110_cds1.png"><img data-entity-type="file" data-entity-uuid="f53e972f-f909-4cb1-a511-08dde37bc591" data-responsive-image-style="inline_images" srcset="https://www.zerohedge.com/sites/default/files/styles/inline_image_desktop/public/inline-images/20180110_cds1.png?itok=JB0sxgfv 1x" src="https://www.zerohedge.com/sites/default/files/inline-images/20180110_cds1.png" alt="https://www.zerohedge.com/sites/default/files/inline-images/20180110_cds1.png" typeof="foaf:Image" /></a></strong></em></p>

<p>In a presentation on the implications of the new tax law, Moody's commented:</p>

<blockquote>
<p>"Any boost to economic growth from the new US tax law will be modest and depend on how businesses and individuals deploy tax savings; <strong>growth unlikely to offset negative impact on government deficits</strong>."</p>

<p>Additionally, the<strong> contribution of tax cuts to aggregate growth will be modest</strong>, around one-tenth of a percentage point of GDP.</p>
</blockquote>

<p>Maybe China is on to something as USA Sovereign CDS is trading at around 1.7x that of Germany CDS - a level near 9 year highs...</p>

<p> </p>

<p><a href="https://www.zerohedge.com/sites/default/files/inline-images/20180110_cds.png"><img data-entity-type="file" data-entity-uuid="81a32549-7f7f-442d-b0d1-397c1fae043f" data-responsive-image-style="inline_images" srcset="https://www.zerohedge.com/sites/default/files/styles/inline_image_desktop/public/inline-images/20180110_cds.png?itok=3ii5tYNF 1x" src="https://www.zerohedge.com/sites/default/files/inline-images/20180110_cds.png" alt="https://www.zerohedge.com/sites/default/files/inline-images/20180110_cds.png" typeof="foaf:Image" /></a></p>

<p> </p>

<p>Full Moody's Presentation below:</p>

<p><iframe class="scribd_iframe_embed" data-aspect-ratio="1.3323485967503692" data-auto-height="false" frameborder="0" height="600" id="doc_75790" scrolling="no" src="https://www.scribd.com/embeds/368871390/content?start_page=1&view_mode=scroll&access_key=key-u0eLGaRmL4rUXkncKwyO&show_recommendations=true" title="Moody's US Tax Law Conference" width="100%"></iframe></p><img src="http://feeds.feedburner.com/~r/zerohedge/feed/~4/Z-derIcRYTA" height="1" width="1" alt=""/>


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