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Government Pensions Face the Axe

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  • Description

    FBN's Liz MacDonald on states that should brace for downgrades due to pension debt.

  • Duration 1:27
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Some states could see a big surprise committees in coming weeks need to bond market pricing -- -- and indeed it was.

Bottom line get a credit rating agency Moody's has -- warning that they were going to make this movie warned about it earlier this year what they're doing guys is they bring more re realistic.

Interest rate returns into pension costs.

And pension debt and states and cities across the country because they basically -- using unrealistic.

Rates -- return of like 89%.

Now Moody's is cutting that down to 5% -- gonna see the top ten worst state pension crises.

Those states are -- -- be say it's an associate wait a second house of Muni bond market going to react because they could face rating downgrade some already Moody's is out there saying.

Cities and counties could face downgrades so.

That -- positive part of this is 43 states have already moved to basically do pension reforms in their states.

A but I it's -- -- an Illinois -- rally in Chicago Providence but that's the bottom line they could possibly see some action on their ratings in the future.

Because now what what he's doing again they're lowering the expect -- rate of return on pension assets because.

The -- said hey we we're gonna get 8910% we don't have to fund it so there was -- funding gap dating fund enough of these pensions.

Now by lowering -- -- gonna say wait a second you know there's that there's a bigger cap and expect that it's -- wake -- that's a big wake up call it's like for attracting and good bottom line here.

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