US Government Officials Reportedly Bracing for Credit Downgrade
Is the United States about to have its AAA credit rating downgraded by Standard + Poor's?
The news wires are currently blowing up with reports of an imminent downgrade. Here is a short blurb courtesy of ABCNews.com:
"A government official tells ABC News that the federal government is expecting and preparing for bond rating agency Standard & Poor’s to downgrade the rating of US debt from its current AAA value."
And from CNBC.com:
"U.S. government officials are bracing for the rating agency Standard & Poor's to downgrade the country's credit as early as this evening or take other possible action, according to someone familiar with the matter."
On July 14th, S&P put the US federal government on a credit watch with negative implications, meaning that there was a 50% chance that the United States would be downgraded within 90 days.
At the time, S&P said that unless the debt ceiling/deficit reduction agreement between the Democrats and Republicans produced "at least" $4 trillion in budget cuts over the next decade, then the United States could be facing a downgrade.
Based on news reports, that downgrade is coming.
According to ABCNews.com, S&P will cite confusion over the process of raising the debt ceiling and lack of confidence that further deficit cuts will be agreed to as some of the reasons behind the downgrade, which appears to be forthcoming.
Edit: The United States did have their credit rating downgraded by S&P tonight, from AAA to AA+.
Source: Yahoo! Finance - US Braces for Possible S&P Downgrade: Source
Source: ABCNews.com - Govt officials: US expecting S&P downgrade
Filed under: The Economic Meltdown