Moody's, downgrade and credit rating
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Dalio fears the U.S. will “print money” to pay off its debts, which creates a different problem for bondholders.
Yields in the Treasury market are rising, threatening to make it more expensive for consumers and the U.S. to manage debt.
Late Friday, ratings agency Moody's announced a one-notch downgrade to the U.S. government's credit rating, at the same time changing its rating outlook from stable to negative.
The stock market didn’t notice. The S&P 500 secured its sixth winning day in a row and the Dow added 137 points. Equity investors at this point seem numb to both fiscal calamity and shaky economic sentiment. Bond traders, meanwhile, responded differently.
Ray Dalio warns that Moody's credit downgrade doesn't reflect the risks of money printing by the federal government in order to pay off debt.
Asian shares fell Monday and U.S. futures and the dollar weakened after Moody’sRatings downgraded the sovereign credit rating for the United States because of its failure to stem a rising tide of debt.
Treasury yield rose above the key 5% level after the ratings downgrade triggered an immediate kneejerk jump in longer-term yields, KBC analysts said.