Moody's lead analyst warns of growing risk of negative rating action for US

While dollar's status as reserve currency makes imminent downgrade unlikely, that may change if US government fails to implement credible debt reduction plan, says lead sovereign analyst at Moody's.

On January 27, Standard & Poor’s downgraded Japan’s sovereign debt from AA to AA-, sparking fears that other developed economies could suffer a similar fate. The same day, Moody’s warned that its outlook on the US remained neutral but was at risk of slipping to negative if the country failed to address its accumulating national debt.

But where Japan’s bond market is dominated by domestic investors, the US is much more vulnerable to shifting international sentiment. Credit talked to Steven Hess