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US Downgrade Raises Anxiety, If Not Interest Rates

Saturday, August 6, 2011 - 5:17 PM
In normal times, in another country, a downgrade in a country's sovereign debt rating probably would force its government to pay higher interest rates to convince investors to keep buying its debt.

If that happened, it would drive up the rates that consumers pay on mortgages and auto loans, which are often tied to the government's interest rate.

But the United States is a special case. Treasury debt is considered the safest investment in the world -- even after the downgrade. Investors don't doubt the U.S. government's ability to repay the $9.8 trillion it owes.

MikeMike327 posts since
Feb 22, 2010
Rep Points: 876