The $1.2 trillion in across-the-board federal budget cuts known as sequestration will not directly impact states’ finances, but will dampen their economic outlook and slow the recovery of their revenues, which are still struggling to return to pre-recession levels, Moody’s Investors Service said Tuesday.

That conclusion comes from a seven-page report, the first in a series of in-depth analyses on the impact of the sequester on each public finance sector rated by Moody’s.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.