By Julian Pecquet - 07/30/11 08:22 PM EDT
International confidence in U.S. Treasury bonds is "slightly eroded" at the moment, International Monetary Fund chief Christine Lagarde told CNN according to an early transcript of Sunday's "Fareed Zakaria GPS."
"There was a positive bias towards the United States of America, towards Treasury bills," Lagarde said. "That was the case historically. And the current crisis is probably chipping into that very positive bias."
The comments come as Moody's cautioned Friday that neither party's debt reduction plans would put the nation's AAA credit rating back on solid footing.
"That very strong confidence that generally led to flight equality and investment in Treasury bonds is slightly eroded at the moment," Lagarde said. "I mean, it was unheard of, only six months, to imagine that the United States could be under negative watch by the rating agencies."