After the S&P downgrade of U.S. debt, America now carries a rating of AA-plus instead of the coveted AAA rating on its Treasury bonds. Austria, Norway, Germany and Australia are no longer our peers ratings-wise – we are, instead, in the company of Japan, China, Spain, Taiwan and Slovenia.
Market watchers have suspected a downgrade was in the works for a while. Not to toot my own horn, but last week in my column about 5 ugly truths about the debt ceiling, one of my takeaways from the deal was that a U.S. credit downgrade was in the works regardless of the fact we avoided default. Looks like my prediction, and the prediction of other financial journalists who made the same call of a credit downgrade, was right.
But now that the inevitable has happened, what does it mean for the market and for individual investors? Read