Moody's says U.S. still needs to find further cuts

Moody's repeated a warning on Monday it could cut the U.S. rating before 2013 if the fiscal or economic outlook weakens significantly but said it saw the potential for a new debt agreement in Washington to cut the budget deficit before then.
With markets in the U.S. still to open after rival Standard & Poor's stripped the United States of its AAA rating on Friday, Moody's said in a statement its own decision to affirm the U.S. rating on August 2 was on the condition that further cuts were found.
It said the United States had a tough job ahead to come up with additional deficit-reduction measures needed to safeguard its Aaa rating from Moody's, but a new debt agreement in Washington was not impossible before 2013.
Three days after rival Standard & Poor's stripped the United States from its AAA rating, Moody's said it could do the same before 2013 if fiscal discipline weakens in the next few months or the economy deteriorates significantly.
Questions about whether U.S. lawmakers will be able to agree on further budget savings next year lie on the center of the disagreement between the two ratings agencies. While S&P downgraded the United States to AA-plus after an August 2 debt deal fell short of its expectations, Moody's is willing to give the government more time tackle its debt problems.

By M Zohaib Gadit