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Money and Monetary Policy

Baltimore's bond rating was raised by Standard & Poor's. But what's in a rating?

Baltimore's bond rating was raised by Standard & Poor's. But what's in a rating?

There was good news in recent days: Standard & Poor’s, the big bond-rating agency, raised Baltimore City's bond rating one notch to AA, up from AA-. Yvonne Wenger did a nice job explaining what this means, for all of you (and all of me) who don't usually think much about the municipal bond rating. She quoted an expert named Frank H. Shafroth: Baltimore's new score — and its upward mobility — signals that the city is a "very safe" place to invest, he said. AAA is the highest rating, followed by AA and A. Rates fall in categories ranging from A to D, which is default. The two takeaways here are, 1. Baltimore's rising bond rating is a...

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