There would be chaos in international financial markets at least in the short term. The most direct impact for China would be the hit on its reserves. The value of China's dollar investments will fall and the shrinking effect may be great.
Li Jie, Director, Reserves Research Institute
at the Central University of Finance and
Economics, China, in Reuters
The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilise the government's medium-term debt dynamics.
S&P rating agency, on US ratings downgrade
It's a headline grabber that may shake Main Street confidence, but I'm confident it won't result in higher Treasury rates. I believe it will have little market impact near-term. There's a global glut of savings with few safe havens. The US, Japan and Italy are the three most liquid sovereign bond markets. Which would you want?
Jack Ablin, Chief Investment Officer,
Harris Private Bank, in Financial Times
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.