Tags: moodys | us | downgrade | rating

Moody’s Zandi: US Downgrade Not End of the World

Thursday, 28 Jul 2011 08:31 AM

An economist at one of the ratings agencies that could potentially strip the United States of it AAA credit rating says such a move wouldn't be too terrible.

"It's not good but I don't think it's the end of the world" if the United States's credit rating is downgraded, Mark Zandi, chief economist of Moody’s Analytics, tells Good Morning America.

The United States must raise its $14.3 trillion debt ceiling by Aug. 2 or it will risk defaulting on its debts, and ratings agencies have said they could subsequently downgrade U.S. debt ratings, which would be a first.

That would lead to higher interest rates across the economy.

unclesamtax200gtty.jpg
(Getty Images photo)
A fixed mortgage rate currently carrying a 4.5 percent rate would probably jump 4.6 percent for 4.75 percent at the most in wake of a downgrade, Zandi says.

"That's not devastating."

Plus if the Washington works out its deficit issues, sunnier skies could return, Zandi adds.

"These things aren't written in stone. We can get that triple-A back if we do the right thing."

To avoid a downgrade, Congress needs to raise the debt ceiling and the government needs to trim deficits.

"If we do those two things, and I think we can, then there would be no reason for a downgrade."

Some are criticizing the ratings agencies, saying they have too much power.

"The reality is these rating agencies have no idea how to rate a $17 trillion economy like the United States," Rep. Darrell Issa, R-Calif., tells radio host Don Imus, as reported by Politico.com.

© 2017 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
StreetTalk
An economist at one of the ratings agencies that could potentially strip the United States of it AAA credit rating says such a move wouldn't be too terrible. It's not good but I don't think it's the end of the world if the United States's credit rating is downgraded,...
moodys,us,downgrade,rating
258
2011-31-28
Thursday, 28 Jul 2011 08:31 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved