U.S. Expecting Debt Downgrade From Standard & Poor’s Tonight
Since early this morning, there’s been a rumor floating around Wall Street that Standard & Poor’s would be downgrading U.S> debt after the markets closed today. Now, ABC News is reporting that Federal officials are expecting that it will indeed occur:
A government official tells ABC News that the federal government is expecting and preparing for bond rating agency Standard & Poor’s to downgrade the rating of US debt from its current AAA value.
Officials reasons given will be the political confusion surrounding the process of raising the debt ceiling, and lack of confidence that the political system will be able to agree to more deficit reduction. A source says Republicans saying that they refuse to accept any tax increases as part of a larger deal will be part of the reason cited.
If this happens, expect it to be the story of the weekend and, perhaps, a game changer in the debate over tax increases.