Yellen Counters Moody Move: Treasury Secretary Janet Yellen enthusiastically rejected Moody’s rating of U.S. debt. Yellen told the APEC Finance Ministers’ Meeting in San Francisco that she disagreed with the ratings agency’s assessment, citing the U.S. economy’s strength and Treasury market liquidity. Yellen noted Moody’s concerns about huge fiscal deficits and debt sustainability owing to rising long-term interest rates.
However, she expressed the Biden administration’s unwavering commitment to a credible and sustainable fiscal path. Plans to address the deficit and strategic investments in the Internal Revenue Service were highlighted as measures to reinforce fiscal responsibility.
Addressing another pressing issue, Yellen called on House Republicans to avert a looming government shutdown that could occur by the week’s end. This potential fiscal standoff marks the third such episode this year, following a spring standoff that brought the federal government perilously close to default.
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Yellen characterized the prospect of a government shutdown as an “unnecessary economic headwind” at a time when the U.S. economy is flourishing and moving in a positive direction. The Treasury Secretary urged cooperation to avoid disruptions that could impede the nation’s economic momentum.
On a more optimistic note, the U.S. Treasury reported a notable improvement in the federal budget deficit for October, shrinking by almost a quarter compared to the previous year. The surge in revenues, attributed to delayed tax payments from disaster-affected areas, contributed to a record-setting month.
While data from the previous month underscored the magnitude of the fiscal deficit in fiscal 2023, reaching nearly $1.7 trillion, Yellen’s resolute stance and the positive fiscal indicators signal the administration’s commitment to navigating economic challenges and sustaining the current trajectory of growth.