Tags: pimco | Consequences | US | Downgrade

El-Erian Sees ‘Massive Consequences’ of US Downgrade

Wednesday, 27 Jul 2011 10:13 AM

Pacific Investment Management Co.’s Mohamed A. El-Erian said there will be “massive consequences” if the U.S. loses its AAA credit rating.

The risk of a credit downgrade is 50 percent even if lawmakers reach an agreement to lift the nation’s debt ceiling before an Aug. 2 deadline, El-Erian, chief executive and co-chief investment officer at the world’s biggest manager of bond funds, said in a radio interview on “Bloomberg Surveillance” with Tom Keene.

Pimco expects the debt ceiling to be lifted, El-Erian said.

Treasury Secretary Timothy F. Geithner has said the U.S. will run out of options to prevent a default unless the $14.3 trillion borrowing limit is increased.

Moody’s Investors Service, Standard & Poor’s and Fitch Ratings have said they may consider downgrading the nation’s AAA ranking if officials fail to resolve the stalemate.

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Pacific Investment Management Co. s Mohamed A. El-Erian said there will be massive consequences if the U.S. loses its AAA credit rating.The risk of a credit downgrade is 50 percent even if lawmakers reach an agreement to lift the nation s debt ceiling before an Aug. 2...
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2011-13-27
Wednesday, 27 Jul 2011 10:13 AM
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