Credit rating agency drops US from AA to AA-

Credit rating agency drops US from AA to AA-

NEW YORK, NY - SEPTEMBER 13: A trader works on the floor of the New York Stock Exchange as Fed Chairman Ben Bernanke speaks live at a news conference on September 13, 2012 in New York City. As investors were encouraged by the Federal Reserve's new bond-buying plan, stocks rose to multi-year highs with The Dow Jones industrial average gaining 202 points in afternoon trading. (Photo by Spencer Platt/Getty Images)

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AP

Posted on September 14, 2012 at 4:21 PM

NEW YORK (AP) -- Egan-Jones is downgrading its rating on U.S. debt to AA- from AA, citing Federal Reserve plans to try to stimulate the economy.

The credit rating agency says the Fed's plans to buy mortgage bonds will likely hurt the economy more than help it. Egan-Jones says the plan will reduce the value of the dollar and raise the price of oil and other commodities, hurting businesses and consumers.

In April, Egan-Jones downgraded the U.S. to AA from AA+. The company stripped the U.S. of a top AAA rating in July 2011.

On Thursday, the Fed said it would buy $40 billion of mortgage bonds a month to help the economic recovery.

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