Friday, August 5, 2011

Standard & Poor’s Downgrades U.S. Credit Rating

The U.S. credit rating was downgraded today. Standard & Poor's made the announcement late Friday that it has cut the US long-term rating from triple-A to AA+.
Based on a Wells Fargo analysis of a possible debt downgrade I don't think much more than a brief and small pullback in bond prices will occur.
Even before the downgrade was announced the bond market was under a bit of pressure today. As a result we gave back some of the gains made yesterday.

A credit rating of AA + still is rated as 0% risk according to the Basel II Accord, 2011

Below is a link to a July 28, 2011 Wells Fargo report titled "Understanding the Consequences of a U.S. Debt Downgrade."

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