The U.S. stock market joined a sell-off around the world Monday in the first trading since Standard & Poor’s downgraded American debt and gave investors another reason to be anxious.(Aug. 8)
One of the top credit rating agencies, Standard & Poor’s, has downgraded the United States’ top-notch AAA rating for the first time ever.
S&P cut the long-term US rating by one notch to AA+ with a negative outlook, citing concerns about budget deficits.
The agency said the deficit reduction plan passed by the US Congress on Tuesday did not go far enough.
Washington was locked in months of acrimonious partisan bickering over a bill to raise the US debt ceiling.
A US treasury department spokesman said of the S&P analysis: “A judgment flawed by a $2 trillion [£1.2 trillion] error speaks for itself.” He did not offer any immediate explanation.
‘Brinksmanship’
But earlier, as rumours swirled about the downgrade on Friday evening, officials in Washington were telling US media that S&P’s sums were deeply flawed.
The unnamed sources were quoted as saying that a treasury official had spotted a $2tn mistake in the agency’s analysis