US will eventually lose AAA credit rating, top investor says

http://rawstory.com/08/news/2009/05/22/us-will-eventually-lose-aaa-credit-rating-top-investor-says/

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US will eventually lose AAA credit rating, top investor says

By Raw Story Published: May 22, 2009 Updated 4 hours ago
The co-chief investment officer of the world’s largest bond fund said the US will eventually lose its top AAA credit rating the same day that Standard and Poor’s rating service downgraded Britain’s national debt from stable to negative.
The US will likely be downgraded in “at least three to four years, if that, but the market will recognize the problems before the rating services - just like it did today,” said Bill Gross of Pacific Investment Management Co.
Thursday’s market declines, Gross said, reflect the fact that investors fear the United States is “going the way of the UK - losing AAA rating which affects all financial assets and the dollar.”
Britain’s debt is approaching 100 percent of its gross domestic product. Standard and Poor’s says it “faces a one in three chance of a ratings cut.”
“US credit rating agency Moody’s Investors Service on Thursday said it is comfortable with the AAA rating on the United States, but it is not guaranteed forever,” the Sydney Morning Herald wrote Friday.
“There are longer-term pressures on the rating, that’s very clear,” Steven Hess, lead analyst for Moody’s, told the paper
“Standard & Poor’s, asked on Thursday about market moves on concerns about the US sovereign credit rating, cited its January affirmation of the AAA rating.”
Gross’ bond fund said earlier this year that the Federal Reserve’s debt will likely mushroom to between $5 trillion and $6 trillion by the end of the year amid major efforts to stimulate the US economy.

Information Researched By: Sister Anonymous