Does Moody’s US downgrade matter?

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Friday, the moody trigger is tunnel and The last top rating of the United States has taken away – Downgrade a notch from AAA to AAA.

But what is the matter?

We Saw the effects of downgrade A few months ago, when moody still seemed to be determined to be determined to skip Sixty -foot flashing neon signage Writing on the wall.

Who knows from the stock market point of view? We have no idea, or how much is important when opening trading on Monday. Of course, S&P’s US sovereign downgrade has promoted the worst single -day decline in stock prices in the United States on August 27 (recognized by the worldly financial crisis. However, the market was quickly healed. People have revealed what the downgrade may mean the financial plumbing.

So, is the downgrade important in financial plastic now? From a mechanical point of view, the answer is definitely “not at all”.

Banks of banks seem to be less likely to be affected by rating change by ratings. This is because the regulators do not distinguish between AAA and AA 1 when determining capital risk. For example, thus Set out of the bis It applies to individual claims to calculate their risk-united resources related to sovereign because of its standard approach for credit risk

Modie could have downed a three-kij-all the way from AA to AA3-and nothing was changed on this front.

How about security management? Ay Notes from Berkless It was seen on Friday night its effects:

For security purposes, a downgrade on AA 1 is also less likely to impact. For example, DTCC And CME View the asset class as US Treasury and haircut maturity and protection type (tips/FRNS) but not rating. This LchAA is less likely to lead a downgrade change in AA. For example, the USTS and Guilts have the same haircut, even the subsequently less rated.

Furthermore, they think that this move will not run at the short end of the curve because:

Since the law has reduced the use of obvious rating guidelines in the order of financial crisis investment.

Thus, they do not expect the wave of wealth to sell resources from the Treasury and Treasury repo to $ 4.5tn from $ 4.5tn.

About the financial markets, the downgrade is very important to the mood itself. If the S&P Global Rating experience is done in the 21st, the firm will be on the ride. Following S&P’s Downgrades more than a decade ago, US Treasury Secretary Tim Gythner threw PuddleAnd filmmaker Michael Moore calls Obama Arrest the firm’s CEOThe As We wrote March:

Someone rented the plane to pull a banner from their rating agency’s offices that they all declared that they should be dismissed and closed their business with a bunch of local governments.

Meanwhile, and obviously have launched the judiciary relatedly relatedly A investigation In S&P. CEO Denben Sharma was in a few weeks Leave the agencyThe When issues were simply moved from the investigation to the true toward $ 5bn Federal suit Prior to the financial crisis of 20, he called for S&P’s downgrade to confuse banks about the credibility of his rating.

Following downgrade, Mortaz Kramer – Global Chief Rating Officer Prior to the Soveome Rating at S&P Global Rating – LinkedIn wrote The danger of revenge was real:

In the United States, rating agencies are controlled and licensed by the SEC (Securities and Exchange Commission). As things like in America today, we must be surprised whether the SEC can work independently from the White House’s will. Keep in mind that previous SEC chairman Gary Jensla resigned on the inauguration day, and Trump made a way for Acolit. Will Trump be so angry at the US downgrade (which he will certainly accept personally) that he will claim his pound meat and retaliate Moody.

We have already seen the White House analysis dismissing and hit out to Modi’s chief economist Mark Jandy. The President’s Assistant Steven Chewong, Tweet: “No one takes his ‘analysis’ seriously. He has proved the wrong time and time again.”

As Reported in MainoftJandi was not the author of this report and worked for Moody’s analysis, it was a separate part of the company that is not part of its rating business.

In general, it is still important to have the effect of a huge downgrade market from AAA, though.

Fisherily, Moody has long estimated the nearest-basket-case metrics for the United States of America. When the AAA rating was re -confirmed in March, it wrote that the country’s AAA rating was “extraordinary economic power and global finance dollars and treasury bond market unique and central role” instead.

And in the previous rating report, the AAA rating re -confirm the AAA rating in November 2023.

The power of the agencies and the administration, such as financial and collective economic policies, can also impose ratings, through the quality of the effectiveness or the quality of the legislature and the judicial institution.

The world has been moving forward since 2023, and is identifying the market to Moody’s-to-to.