BUSINESS

Egan-Jones downgrades US debt rating to AA- from AA, citing Fed's plans to stimulate economy

09/14/2012 05:08 EDT | Updated 11/14/2012 05:12 EST
NEW YORK, N.Y. - Egan-Jones is downgrading its rating on U.S. debt to AA- from AA, citing new Federal Reserve plans to try to stimulate the economy.

The credit rating agency says the Fed plans announced Thursday to buy mortgage bonds will likely hurt the economy more than help it.

Egan-Jones says the plan will reduce the value of the dollar and raise the price of oil and other commodities, hurting businesses and consumers.

It is the second downgrade of the U.S. by the company.

In April, Egan-Jones downgraded the U.S. to AA from AA+. The company stripped the U.S. of a top AAA rating in July 2011.

Egan-Jones is a much smaller but well-known competitor to the big three rating agencies: Moody's Investors Service, Fitch Ratings and Standard & Poor's.