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Ep. 48 - USA Downgrade & Forward Projections
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The epic rally stalled.
Many are describing the setback as an elaborate unsolvable debt spiral.
I think it’s simpler…and it all kicked off last Friday.
Let’s unpack Moody’s USA credit downgrade and make evidence-based forward projections.
On Friday, Moody’s downgraded the United States credit rating to Aa1 from Aaa, citing the one-notch downgrade…reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.
This is a big deal.
A ratings slash implies that the US is a riskier debtor, and it’s sending interest rates higher.
The bad news bears are telling us that this debt spiral is creating some soon-to-come calamity.
Just don’t take the bait.
What’s occurring right now in equities and bonds is exactly what you should expect after a ratings cut.
Once you review the evidence you’ll see the big setup at hand.
Is there more downside ahead for equities? Likely.
Should investors buy the dip? Absolutely.
Let’s unpack why.
Disclosure: This recap uses AI to better explore our post here: https://moneyflows.com/blog/usa-credit-downgrade-forward-projections/
Remember none of this is personal advice of any kind. This is for entertainment and informational purposes only.
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