now, john, we've got four ratings agencies, the big ones -- fitch, moody's, s&p, the morningstarratingsp, have a aaa rating. fitch and morningstar have, i believe at the moment, in different wording put the u.s. credit rating on negative watch. so at the moment, ratings watch negative. and then bbrs has negative implications. when do you think they will make a decision as to whether they will downgrade the u.s.? >> well, you'll have to ask dbrs and fitch that question, but normally had be a decision that they would come to the a fairly quickly after this would be over. liz: well, that's in four days. less than five days away, june 5th is the day that the treasury department has said, that's it, that's the x date, we can't push it any further, we will run out of money. so even if there is a deal, clearly kevin mccarthy the, the breaking news as we just told you, was he's going to the hold a news conference. he's getting bold, is he not, hiking that this thing will pasg will pass. to the me, that still doesn't matter if you use the s&p example from 2011. >> i think the focus probably shou

also, if moody's or s&p or any of the credit raters do something to downgrade, remember they did that ex-post facto, after they actually raised the debt ceiling in 2011. i have been told they could move preempt preemptively sometime in mid-may, maybe after this meeting at the white house on may 9 but that could have an impact also and again, you know, something we're looking for here is what is that vote matrix? nobody knows what can pass the house, what can pass the senate. there in-lies the problem no matter what the markets or credit raters say. neil: were you referring to what moody's or another ratings agency could do in the interim to potentially lower a credit rating ahead of our technically running out of cash, or so the treasury says, june 1. >> that's right. well the argument back in 2011 is that they did not like all the drama. neil: right, i remember. reporter: that washington infused into the process. they said we have no confidence in you being able to address this so if we get down the train tracks past may 9 and obviously they don't have the votes in the house, they do

i do not expect this from moody's but s&p did it last time and could theoretically do it again.is something treasury is constantly referencing. we hear that a lot from staff. that would be a negative event to watch for. the third thing would be to have a scenario where the house refuses to vote. that would negate option number two you have that negative parklike moment where the house fails to pass a bill. instead use the senate take the next vote. i do not even care if it is a show vote on the limit safe grow out. i would love to see them both next. guy: a viewer just wrote in asking why haven't the dems written a bill in the senate? henrietta: two bills have been found in the senate, one is the limit safe grow act and the other is the clean debt ceiling height won that, neither party is about a budget at the senate or house level. you really just have the limit, save, grow act and the administration's budget. those are the starting positions. watch the appropriations committees on the house side. they are starting markups on four appropriations bills which directly will be dec

>> first of all, of course s&p downgraded us in 2011 to double a minus. that leaves moody'sitch. the problem is if we get a second downgrade, the country i'm talking about, then there are many funds, many money market funds and things like that that can't buy our debt, and that has adverse consequences. i think fitch did the right thing in telling everybody, this is what's out there, this is what could happen, this is what will happen if you guys really are dumb enough to let this country default. but i would like to think -- i don't know. i would like to think that the people at fitch and moody's said less about this would at least wait until there's an actual default before they did something like this, because the consequences are so severe. i would like to think this would happen after the fact, rather than before the fact. of course, if we get a deal, hopefully we get out of this alive in terms of our bond ratings and we continue to issue debt. >> let's talk about the politics now. stand by. we are bringing in michael steele, the former republican national committee, fo

but fitch, one of the top three credit rating agencies, along with moody's and s&p, fitch is warning that it could downgrade the united states' perfect credit rating if there is no agreement to raise the debt limit soon. tell us more about what that might mean, and is that raising alarms at the white house? >> well, jake, the white house says that that just underscores their warnings about the consequences of default and the urgency of raising the debt ceiling. we heard president biden once again today say that default is not an option because of those very consequences. and you know, he called ongoing negotiations productive. but it's also clear in talking with officials here that these two sides are still very far apart. and while we haven't seen the kind of stock market plunge of 2011 when the market dropped 17% around that debt ceiling standoff, i spoke with the deputy treasury secretary today and he said they are watching the volatility in the bond market very, very closely and he said it's already raising the costs for the u.s. government to borrow more money. >> the cost of bo

at this point in the debt ceiling debate 12 years, s&p and moody's had already placed the u.s. to legislation to actually raise the debt ceiling on the day of deadline, s&p down dp graded the u.s. anyway, citing political bringsksmanship. even though it's been sanguine so far, prior episodes show it may not be over quite yet. as you can see from that chart on your screen there, guys >> i'm going to ask a question i know you can't answer, leslie, but i know that you can handle anything, so i'm going to do it. any indication we could hear from moody's or s&p? >> because fitch came out? >> yeah. you wonder >> definitely possible >> i know there's no answer. i'm just kind of throwing it to the wind to just generate, you know, controversy. >> yeah. i mean, i think in the last few days, we have seen kind of a tone shift at the other two ratings agencies, especially moody's. with that reuters report yesterday, where an analyst basically said that, you know, yeah, this is something that we are actually considering whereas before, they said it really had to be a bona fide default to cha

when you look at 2011, the debt ceiling crisis at that time, s&p and moody said they were reviewing the united states for a potential downgrade. s&p actually followed through on a downgrade. moody's did not. they might be trying to get ahead of the curve in this case. it's an open question about whether or not the other credit rating agencies will try to move as well. broadly speaking, the story is that the independent auditors are worried the united states, because of the brinksmanship, will not hold on to its reputation to pay its bills on time and in full, which would be damaging to the world economy. >> doug, let's talk about that. i talked to foreign diplomats. they are not only nervous but are saying, what is going on? what kind of democracy do you have? they are comparing it to the political chaos in israel and other systems where you have got coalition governments that keep rising and falling. italy. that's not a great comparison for the world's greatest democracy and the world's greatest economy. >> certainly, the treasuries are the foundation of the global financial system. if

watching the news coming up next and dw news asia, the indian leda, and they're under moody addresses. thousands from the d. s. 4 in sidney and the double governor of a famous statue in hong kong, tons of kids in the will. coming up next in dw, and use asia with their strategy. remember, you can get more international news headlines on our website, w, w dot com. and on facebook and twitter as well, my colleagues feel gale will be here at the top of the hour with your next news around us. and you can sneak in and thanks for watching and have a lovely day the nurse to us that's why we listen to their stories reporter.

. >> i worry about "the moodys," the real moodys, the s&p, and remember last time i think it set off not helpful from the perspective of consumers that's one thing target's ceo said they do talk to customers. >> i know people who are like i'm holding off on a purchase, i'm waiting. >> are the ratings companies say we'll wait and youb grade someone. >> they look at it as they play a role in pushing some of these things too if the ratings agencies do act, it definitely amps up the pressure normally it's the markets that do that. there hasn't been a whole lot. aside from short-term t-bill activity, there's not been a lot of activity. they just don't think they'll do it. >> joe biden's political team is extremely worried about the potential consequences of a downgrade. right now hit team is feeling pretty confident if the nominee would be donald trump or ron desantis, they would go into the next president chal situation favored. but if the economy suffers any sort of setback, they'd be going into a presidential election against someone like donald trump and it would be very harmful to th

if the other two agencies were to follow fitch, that's s&p and moody's, then that would have an impacter term damage. one is we're diverting attention in congress and the administration from things that we need done to promote sustainable growth and productivity. two, we are eroding trust even more domestically in the policy making process. and finally, we signalling to the rest of the world that we can't get our account together. neither of these three things, none of them, are good things. >> i sat down with the federal reserve. people who follow you know how critical you've been of the fed and how they handled inflation for more than a year now. but i thought this was interesting. he talked about being open to a pause in rate hikes. is this meeting, potentially raising them after it. when we saw stop and go in the 70s, it was a disaster for the economy. it prolonged the pain. here's how he explains why he thinks this time is different. let's listen. >> what i don't want to do is announce that we're done raising rates, have inflation pick back up again and then we have to reverse our

. >> there are three big credit rating agencies, s&p, fitch and moody's. fitch is warning because of the possibility of a default, they're warning they might have to lower the united states credit rating, that could therefore make everything more expensive. specifically what that means is overseas holders of u.s. treasuries, of bonds may decide i'm not interested in holding u.s. bonds anymore if the united states can't be counted on to pay its debts. if this happens, if we have a credit default or if the country doesn't hit -- or goes through the debt limit talks, here's what could be affected. bonds, mortgages as well, car loans could get more expensive and credit cards. so, what would that mean for individuals out there? who would be affected? who might not get their money if, in fact, the united states blows through these talks, this deadline? it could mean delays on getting your social security checks, federal employees could go without a paycheck. we'll see interest rate hikes, as we said, credit cards and mortgages. we could see, according to many ec

has anyone picked up the damn phone and called s&p, moody's and said, hey, if we just keep borrowing money and provide no vision, because remember, our brothers and sisters on the left made this, hey, we did that inflation reduction act which is an orwellian name, and we had some deficit reduction in there. now that it's been rescored there's no deficit reduction in there. i'm going to show you the receipts coming in. the additional actual cost of the grants and giveaways on the green energy. it doesn't reduce the deficit. and once again, the only times this place, almost, i think, 1993 was the last, or excuse me, 1983, was the last time this place actually did some deficit management without being up against a debt ceiling. of course also understand, at that time social security was about to go broke and you had this guy named ronald reagan and tip o'neill who got together and said we're going to do the moral thing. we're going to save social security. and they got together and did something on debt, deficits, and social security. the problem was, that was supposed to be a solution

image is more relaxed , more casual , more moody, we have a rather bright sky-blue shirt and i added a very accent cool t-shirt with neon colors. well, that 'sit was balanced with calm straight jeans and also mules with a small heel , neon things. very eye-catching. therefore, if you apply them on the wrong part of the body, then figure flaws will immediately be visible, so try not to choose too tight acidic things. shades. don't be afraid to experiment with bright colors. see our section and be the most stylish. what's on this trendy note? our first hour of the good knapsack belarus program is coming to an end and once again we want to remind you that today, may 15, is day of the seven. don't forget to tell your friends and family. how much you love them. and try, of course, to spend this monday with your family. and in general, try to spend as much time as possible with your family, we leave you alone with a wonderful musical composition. and we'll be back right after the news block, see what's on me. hello , today we will perform a set of exercises for the back so that our posture is a straight spine. always been healthy it is necessary t

political dynamics stay as they are, if somebody like fistch and/or moody's decided that's uncertainty is causing the problem that s&p said and a second agency downgrades us, we are now officially not a aaa security we don't really know what kind of ripple effects that could have through the financial markets. >> even though we're wringing our hands over everything you said, the market continues to hunt for constructive elements can i get you to talk about whether or not ipos can actually get a window here this summer? >> well, what we've seen, really, ann walsh, my partner, and the cio at guggenheim investments, she mentioned we seem to be in a kind of a rolling recession as we go through this, where we had a boom in goods and then supply chain interruptions and collapse in goods and inventory problems. meantime, services that were shut down are now booming, as you just mentioned so, there's a lot going on of sort of evolving ripple effects of not just one kind of economy moving in one direction. basically, the same thing's been true about the markets i think you just talked about the markets have been relatively

moodies and fisk. they're ratings agencies. they were not behind the 2011 down grade that s&p led.'s growing concern that the several agencies because of this chica chicanerery, that they could down grade our debt. i want to go to the house ways and means chairman, worried about the possibility of that to happen. jason smith from missouri. chairman, always good to have you. what do you think? this might have been the first time, sir, the markets were saying we should prepare -- should they prepare for something like that. >> you know, we need to -- just shows how we need to get in agreement finalized. from 9 7 days, speaker mccarthy waited for joe biden to come to the table. we passed an agreement. we need to get the job done. house republicans are the only ones that have voted for a debt limit increase. every democrat in congress, you cannot find one that has voted to increase the debt limit this congress. >> neil: of course, yours is tied to spending cuts. democrats are not on board with that. that could change. seems like each side is getting more locked into their positions or

s&p did that in 2011. that really hit the obama white house hard. is this biden white house ready for a possible downgrade to u.s. debt? fitch and moodiesthink they're ready for anything. this financial team in charge starting with janet yellen is completely hapless. they keep getting blindsided by tax revenues. revenues are coming in below expectations. liz, why wouldn't they come in below expectations? nobody is making money in the market that was a big factor in better than expected revenues in gun 2001. i think these people have no idea what they're. liz: what concerns you the most? what happens next, do you you think? >> i think we're in for a slowdown. because of that banks have problem loans which they always do in a slowdown. i think estimates will get worse. liz: yeah. >> everyone hopes the fed rescues everybody by lower rates again. i don't think sway powell will talk about lowering rates tomorrow. people will be nervous. liz: liz peek, thank you so much. to in tomorrow night, "fox news sunday" host shannon bream, and much, much more. thanks for watching "the evening edit." time for the bottom bottom. what a day. still looks l

for weighing in today ahead of powell. >> sure thing. >> mark zandi from moody's. >> as we go to break check out leaders on the snd 4208. half hour, 20 minutes away from powell back in three. no, no, no, no, no, no, no. there's a problem with my paycheck. it's short. someone messed it up? i'm in the middle of nowhere. ♪ unnecessary action hero ♪ was that necessary? nope. neither are paycheck problems. with paycom, employees do their own payroll. no problems, no surprises. [narrator] schedule a demo at paycom.com and make the unnecessary, unnecessary. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today. this is ge aerospace, advancing flight for future generations. ♪ welcome to a new era of flight. >>> fans, please direct your attention to the pitcher's mound, honorary first pitch, david faber, a member of cnbc's "squawk on the street" and a life-long mets fan and queens native our catcher is his son jona

whether or not the other ratings agencies do the same, s&p has already stepped down, they never reraised the rating since 2011. moody'sthe third other major credit ratings agency do they put a notice of a potential downgrade as well. we'll have to watch. >> not all of this is exceptionally surprising, right? we knew the threat of what that would lead to. what impact is this already having on the economy, and what would a downgrade mean for somebody in the next few months, the next year, if they want to buy a house, a car. >> it's important to note, yes, this was largely expected. the timing of this no one knew. this is a warning for a downgrade, no at downgrade its. it explains why the dow jones is down 3/10 of a percent. it's not reacting that negatively to the news. if they do follow through on a downgrade, that undermines the confidence in the u.s. treasury bonds that the government issues. so if that is the case, could you see yields start to rise? if those start to rise, maybe interest rates on car payments, on home loans, on business loans start to rise. that could have a very terrible impact on americans, in ad

competitors like fitch s&p and moody to reach similar credit evaluations 99% of the time. esg counterparts cannot say the same thing. ms ci and sustained analytics. they only reach the same ratings of 54% of the time for just about one in two. the ratings are incredibly discretionary. this the role the federal government should jump by be able to gamble with retirement funds and pensions of the american worker? >> no. we've heard during this hearing today as a republican issue. in fact dealing with risks that has a bipartisan issue the senate showed very strongly when they voted to overturn the rule of the department of labor had advanced as well as the we are currently deliberating. the concern had to be what is it mean to be a fiduciary? what are we doing to protect the hard earned dollars and investments of american workers? clearly this demonstration is gone too far. >> attorney general, federal, state, local governments defined benefit plans make it $7.6 trillion u.s. investment retirement market. how is funneling these workers retirement funds toward bearing lobbying

there is a missed payment on a principal payment or a missed coupon payment, that moody's will put the u.s. in default or the st the u.s. in default, and that will trigger cds payments on the swaps. i think that is not realistic. i say that with reference to the fact that unlike a corporate bond or obligation, u.s. treasuries do not have cross default provisions. if the treasury does not make a payment on a bond, it does not accelerate the payments on every other obligation they have. you can say that bond has defaulted but the corpus of debt has not defaulted. there are no cross default provisions. that's tricky because you think of a default as something different and moody's would have to think about it as something different if a similar thing happened for corporate issuer. that calls for a judgment call and it's not clear that even if a payment is skipped that moody's will go that far. they can avoid calling default, we can avoid triggering cds. jonathan: what would that mean for treasuries used as collateral? thierry: the value of the collateral is only as good as the price. to the extent that we are tal

s&p. do you see any risk of that happening again this time around how do you see the market impact if that happens? >> downgrade, frank, i'm not sure, but it may have been moody'se downgrade occurred because of the misunderstanding. there was a process of the last weekend of july which allowed the board based in london to determine there was enough risk to downgrade the u.s that came and went the real harm to the u.s. economy and taxpayers is erosion of confidence in the reserve ability to manage its books and the costs associated as you pointed out with costs rising are showing up in the one to four-month bills of obills. the higher yields comes out of the taxpayers' pocket and never discussed or replenished there are real costs every day with this uncertainty with the debt ceiling. >> a lot of uncertainty and real world costs if we do default a lot of people, forget about wall street, would be hurt i want to go back to the negotiations yesterday, mccarthy said he had a productive call with he and the white house. he talked about the prof profess professionalism. how do you see the negotiations continues from here? are we on a lineal path? >> all of those, fra

s&p downgraded the u.s. credit rating from aaa to aa. could that happen again, do you think? >> i don't speak for the agency. each agency is different they have their own methodologies. the moody's downgrade would only occur if the treasury missed a payment on the debt. i think that is highly unlikely. even if we breach, i suspect the treasury would prioritize those debt payments above everything else, at least for awhile. i think the ball for that is pretty high. it will be downgraded if there's a breach and it goes on for awhile. but the far here is pretty high. >> thank you so much. good to see you. >>> up next, what tim scott is up against as he enters the 2024 presidential race. fellow republican nancy mace will be here. >>> plus how a republican mega donor is defending his friendship and gifts to clarence thomas, as lawmakers question those luxury trips and other presence to the supreme court justice and the real life panic after a fake picture of the pentagon popped up on social immemedia. we'll show it to you.. i'm off to america's best i heard what you said about not overpaying for glasses. two pairs and a free, quality eye exam starting at just $79.95? the exam alone i