Moodys downgraded US credit rating
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Yields in the Treasury market are rising, threatening to make it more expensive for consumers and the U.S. to manage debt.
Moody's downgrade of the U.S. sovereign credit rating late Friday appeared to have a modest impact on corporate bond market activity on Monday, as spreads widened slightly and new bond sales started the week softer than expected.
Moody’s still has a perfect Aaa rating on Apple’s bonds. Yields for long-term Apple debt are higher than the 10-Year Treasury as well.
The debt downgrade is raising concerns that investors could reevaluate their appetite for U.S. government bonds, with the potential for rising yields.
The downgrade follows a change in the outlook on the sovereign in 2023 due to wider fiscal deficit and higher interest payments, and comes as Congress debates tax and spending plans that could deepen the fiscal hole.
Stock traders knew it was an ugly setup entering Monday, with futures lower in premarket action and Treasury yields racing higher after Moody’s downgraded the US debt at the very end of last week.