America’s Credit Rating Went Down. So What?
Slate Money
00:00
The Role of Credit Scores in the Rating System
The idea that there's credit risk to the US government is not something that people really care about in any kind of way that's visible in the markets. Some financial firms don't, they treat Treasury bonds separate because some firms or products are only allowed to trade in certain grades of bonds. If you have a fund that says we only invest in AAA rated securities, it will actually say very explicitly and certainly since 2011, we only investment in AAA securities and US treasury rate securities. So by definition, there is no credit spread for the US treasury bonds because they are just the interest rate.
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