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Saturday, July 4th, 2015


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Possible Effects of S&P Downgrade on U.S. Consumers

Possible Effects of S&P Downgrade on U.S. ConsumersThe major financial ratings firm Standard & Poor’s (S&P) officially lowered the U.S. credit rating on August 5. This downgrade is widely being characterized as a massive shake-up bound to cause problems for major financial markets. Effects of the lowered rating on individual consumers are not yet clear, according to the Boston Globe.

The news source reports that some fear drastic and damaging consequences to the U.S. economy, including inflation and increased interest rates. Others believe that such consequences are not definite, and if they are to occur they will not come for several months.

Although the lowered credit ratings of the U.S. – and of major financial agencies Fannie Mae and Freddie Mac – will certainly increase Treasury bond interest rates, the consumer interest rates may only increase negligibly due to the stable, established reputation of those bonds. Bill Driscoll, a Plymouth, Massachusetts financial planner, confirmed this fact.

“The Federal Reserve is going to do everything it can to keep interest rates low, and it has more influence than Standard and Poor’s,” Driscoll told the news source.

Reuters reported that the Banking Committee of the U.S. Senate is initiating an investigation into the S&P credit rating downgrade, though no announcements of official hearing have been made as of August 9.

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One Response to Possible Effects of S&P Downgrade on U.S. Consumers

  1. Dangelny says:

    Undeniably believe that which you said. Your foavrite justification seemed to be on the web the easiest thing to be aware of. I say to you, I certainly get annoyed while people think about worries that they just don’t know about. You managed to hit the nail upon the top as well as defined out the whole thing without having side effect , people could take a signal. Will likely be back to get more. Thanks

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