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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