Brazil needs economic growth of 2 percent coupled with a primary budget surplus of 2 percent of GDP to stabilize its debt ratios, Moody's analyst Mauro Leos said in a phone interview.
Government revenue has plunged since the beginning of the year, however, as Brazil sinks into a deep recession expected to last through 2016.
Further clouding the economic outlook is a growing political crisis that has raised questions about Rousseff's ability to serve out her term.
Leos said it was tough to know know how a possible impeachment of Rousseff would affect the rating.
"If there are unexpected events that complicate the outlook, such as this one you mentioned, then we would have to assess how significant they are," he said.
The possibility of a downgrade has spooked politicians as well as investors as it would increase borrowing costs to the government and Brazilian companies alike.
Finance Minister Joaquim Levy said the Moody's statement "shows the priorities that we need to have with regard to maintaining the quality of our public debt."
Planning Minister Nelson Barbosa said he thought Brazil would not lose the investment grade rating, calling the country's fiscal trajectory "sustainable."
Levy has been pursuing a series of spending cuts and tax hikes aimed at curbing budget deficits that had spiraled during Rousseff's first term in office.
"The news was less worse than expected since investors were beginning to believe that Moody's would try to catch up with S&P and leave Brazil closer to losing investment grade," said Alexandre Póvoa of Canepa Asset Management in Rio de Janeiro.