US Debt Safety Downgraded 1 Level By Fitch

[Economy 52,834]

https://www.google.ca/amp/s/www.nbcnews.com/news/amp/rcna84051

 

Fitch rating agency downgraded US debt investment grade from the top rating (AAA) down 1 level to AA+ in line with other agencies sighting rapidly growing debt and "erosion of governance" in the Government

 

AA+ is still a really good rating. Though US debt is extremely high and most Nations with debt over 100% of GDP have lower ratings, the US having a highly diversified and high income economy and reserve currency Status makes a default and insolvency highly unlikely in the short to medium term

[Lippoutou 4,657]

[Economy 52,834]

52 minutes ago, Lippoutou said:

Im surprised it took this long tbh. Only a handful of countries in the world still have a Triple AAA from all 3 main rating agencies

 

I feel the US kept it longer than any other country would just because of the perception that as the largest economy in the world and having currency reserve status, it has a "too big to fail" kind of perception that it gives out (which to a degree but not unlimitedly so does help them in accessing credit even as the debt levels start to get out of hand)

[pachinko 10,752]

Does this mean house prices can decrease?  

[Versace 8,074]

I’m a credit analyst so this was quite the news at work but it’s not like anyone is surprised. Also AA+ is very far from bad, it’s considered a high investment grade rating. Wonder if Moody’s is going to downgrade them eventually. 

 

[Guest]

1 hour ago, pachinko said:

Does this mean house prices can decrease?  

They mentioned this at my job - I work in marketing in mortgage company. They're rising.

https://abcnews.go.com/Business/us-credit-downgrade-means-economy-finances/story?id=101946875

[Economy 52,834]

4 hours ago, pachinko said:

Does this mean house prices can decrease?  

The only correlation I can possibly see to home prices related to this, is that if bond yields went up higher than they would without the downgrade for a period of time, the high rates would ripple down to mortgages rates as well and higher mortgage rates are not good for prices.

 

But realistically, the impacts of this will be barely measurable.

 

4 hours ago, Versace said:

I’m a credit analyst so this was quite the news at work but it’s not like anyone is surprised. Also AA+ is very far from bad, it’s considered a high investment grade rating. Wonder if Moody’s is going to downgrade them eventually. 

 

Oh cool. What kind of credit analyst? For a private company?

 

And I thought for some reason Moody's had already downgraded the US. I had this idea that only 1 major agency still had the US at Triple AAA... Or was it only 1 agency that had downgraded before?

[Versace 8,074]

4 hours ago, Economy said:

The only correlation I can possibly see to home prices related to this, is that if bond yields went up higher than they would without the downgrade for a period of time, the high rates would ripple down to mortgages rates as well and higher mortgage rates are not good for prices.

 

But realistically, the impacts of this will be barely measurable.

 

Oh cool. What kind of credit analyst? For a private company?

 

And I thought for some reason Moody's had already downgraded the US. I had this idea that only 1 major agency still had the US at Triple AAA... Or was it only 1 agency that had downgraded before?

Yup it’s the latter, only 1 agency had downgraded them before, now 2. So only Moody’s keeping the AAA rating for now. 

[FATCAT 60,886]

Thanks Republicans.

[Economy 52,834]

12 hours ago, Versace said:

Yup it’s the latter, only 1 agency had downgraded them before, now 2. So only Moody’s keeping the AAA rating for now. 

Ok I got that mixed up in the reverse. I thought it was 2 that had downgraded and 1 was left that hadn't yet