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US Treasury Secretary Timothy Geithner today moved to shore up confidence in the nation's economy amid fears that its top-notch credit rating faces a downgrade.
Geithner pledged to cut the budget deficit after analysts warned the US will lose its cherished AAA rating because of spiralling levels of debt after the $700 billion bailout of the financial system. “It's very important that this Congress and this President put in place policies that will bring those deficits down to a sustainable level over the medium term,” Geithner said.
His remarks come only a day after Standard & Poor's reduced its outlook on the UK from “stable” to “negative” and warned there was a one-in-three chance it would lose its AAA credit rating.
The news stunned the City and Westminster and sent the pound tumbling against the dollar and a host of other currencies.
Bill Gross, manager of the world's biggest bond fund and co-chief investment officer of Pacific Investment Management, said the US will “eventually” lose its AAA rating.
He said America is “going the way of the UK” and will be downgraded in “at least three to four years, if that, but the market will recognise the problems before the rating services”.
Reader views (5)
' the market will recognise the problems before the rating services”.'
Which shows what's been wrong all these years with the rating services, commercial businesses whose share price depended on the goodwill of those they were rating!
- Mdj E10, london uk, 22/05/2009 17:37
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The Chinese must be fuming, time to start buying gold...but hey GB sold most of ours so guess where the US goes the UK is sure to follow, depressing
- Wallytrader, London, 22/05/2009 13:18
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So are you seriously trying to tell us that some-one somewhere is concerned about debt levels??..no.. really? .. seems like these agencies are finally beginning to do their jobs ..shame they didnt do that 3-4 years ago and then we might not have been in this mess in the first place
- Michael, London, 22/05/2009 11:15
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Reading this, I wonder what price is on offer for Obama as a one-termer?
- Ted, London, 22/05/2009 10:59
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Hold on to your hats..this sucker is going down.
- Corbo, Norwich England, 22/05/2009 08:23
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