4 ms·

Wouldn't a downgrade be expected to result in an interest rate _increase_, due to higher risk?

• hugh3 15y ago
  You'd think so, wouldn't you? On the other hand, where else are you gonna put your money?
  • _delirium 15y ago
    In this case I'm not too surprised at the lack of change, mostly because unlike with a little-known corporate bond or an inscrutable country nobody has info on, the S&P ratings don't really add new information that any economic analyst didn't already know about U.S. Treasury bonds. So, assuming anything remotely approaching an efficient market, any information S&P based its ratings decision on should've already been priced into the bond prices, because it was information everyone else has also had for a while now.