Moody, credit rating
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The Philippine central bank may consider reducing its holdings of US Treasuries after Moody’s Ratings downgraded the US’ credit score, according to Governor Eli Remolona.
The debt downgrade is raising concerns that investors could reevaluate their appetite for U.S. government bonds, with the potential for rising yields.
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Moody's U.S. debt downgrade is raising concerns that investors could reevaluate their appetite for U.S. government bonds, with the potential for rising yields to put pressure on stocks that are trading at elevated valuations.
The Moody’s announcement sent the yield on a 30-year Treasury bond to a high of 5.01% at one point on Monday. Bond yields rise as bond prices fall. When a selloff hits and demand for bonds dries up, it sends bond prices lower. In turn, bond yields move higher.
Yields in the Treasury market are rising, threatening to make it more expensive for consumers and the U.S. to manage debt.
The Moody's downgrade is a widely expected move that doesn't change the status of Treasuries. It doesn't force institutions to sell. It just makes headlines.