bearish

The US Lost Its AAA-Rating – Why It Does Matter (I)

278 Views08 Aug 2023 15:14
SUMMARY
  • Assuming rating agencies assume some (implicit) limit to fiscal deficits and debt-to-GDP ratios, even the world's deepest, liquid, and vital bond market is vulnerable to rating downgrades.
  • Soaring interest costs, putting the US on a trajectory of a 10% budget deficit, have prompted Fitch to take its AAA-rating.
  • While discussion focus on the unique status of the US Treasury Market, this downgrade touched the underlying issue, debt sustainability.
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Jeroen Blokland
Global Multi-Asset Investment Strategist
True Insights
Multi-AssetCross Asset Strategy
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