Come back in 2...3...4..5...10 years .....this will never be resolved. And why does it matter. The more trillions in debt the US piles on, the higher equities rise.....why worry about a ridiculous down grade https://www.ft.com/content/2ed8372b-8a82-4198-b6c1-dd1b9ef8feaa
The downgrade by Moody was most likely a political move. Why just Trump four months into presidency is responsible for the downgrade. I don't get. It's a little bit ridiculous to think that are president being an officer four months is the whole reason that Moody's downgraded the credit rating of the United States at this moment. That could have easily have done so during Obama and Biden's administration, but they didn't because they're a left leaning organization. BTW clearly another political motivated post again in the wrong section after you have been warned. https://www.elitetrader.com/et/threads/political-beliefs-can-override-logic.384645/ @S2007S
Dude, they waited for Trump to be president to downgrade because the King is playing 3D Chess. Don't you remember ? I don't know what he's going to do but he's going to use it to pump the market. "They didn't downgrade earlier because I am the best."
In the short run, what matters is the backdrop. If you remember, the S&P downgrade in 2011 is caused a nice little shitshow (because there was already debt crisis ongoing in Europe) while the Fitch downgrade in 2023 it was a non-event (because we had a steaming hot stock market fueled by AI etc). Today, we have a president who wants to increase our debt to GDP to about 135% if he passes the bill, so who knows what's going to happen. Also, important note is that after a certain number of downgrades (from here, another downgrade will take us below highgrade investment tier), there are regulatory consequences and foreigners are already a bit tired of investing into our debt. PS. Having read the book, I have to note that they done a wonderful job listing the crises, but they kind of failed to properly accentuate the potential consequences of financial and/or debt crises. We have countries all around the world that fell into decline and never came back from financial crises. Some of the great generational switches were driven by debt crises (most recent one being US replacing the US as the global financial leader). As a side note, if our policy makers have gone "more Rogoff less Krugman" we probably would not be in this shit show right now.