Moody's Threatens US with Debt Downgrade

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Moody's Investor Service says it will likely cut the U.S. government's AAA credit rating if Congress can't reach a deal on the federal budget.

Should negotiators fail to come to an agreement, automatic spending cuts and tax hikes will take effect.

Many economists warn that the "fiscal cliff" could lead to another recession and drive up the unemployment rate.

Meanwhile, investors are looking for the Federal Reserve to take action to jump-start America's anemic economy.

The news comes as the Fed begins a two-day meeting Wednesday.

Some money experts feel the government will be driven to act now because the economy isn't growing fast enough to reduce high unemployment.

A move by the Fed could include a third round of bond purchases, designed to ease long-term interest rates and spark borrowing and spending. It's called "quantitative easing" or QE.

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