One currency strategist, however, did not think there would be wholesale selling by foreigners. He said there was likely to be weakness in the U. The downgrade was immediately pounced on by candidates vying for the Republican presidential nomination.
The downgrade, 15 months before the next presidential election, and debt will be top campaign issues.. Business News Updated. China state paper says U. One of the problems that everyone is worried about with a downgrade is there is a lot of investment guidelines where you are forced to maintain certain credit quality, and if you are bumping up against it, all of a sudden you are going to fall below your guidelines, so that means you probably have to buy more Treasuries and probably sell corporate debt or something like that.
Treasury securities. It is a tiny market and it is easily spooked but it is heavily invested in by retail investors. That is going to be the one I am going to be keeping an eye on. I thought at the time when they released it there would have been a downgrade.
There are going to be ripples going across the pond. Business News Updated. By Reuters Staff 9 Min Read. If the government dishes out wisely to reduce scarring in the labor market, prevent social and political unrest, and to set up the economy for a faster rebound, then it could be money well spent, eventually enhancing its credit credentials. By providing your email, you agree to the Quartz Privacy Policy. Skip to navigation Skip to content. Discover Membership. Editions Quartz.
More from Quartz About Quartz. Correspondents say the downgrade could erode investors' confidence in the world's largest economy. It is already struggling with huge debts, unemployment of 9. The downgrade is a major embarrassment for the administration of President Barack Obama and could raise the cost of US government borrowing.
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