Rebel Capitalist News US Debt Just Downgraded (What You Need To Know)
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May 21, 2025 The recent downgrade of U.S. credit by Moody's raises important concerns about borrowers and the economy. The discussion critiques mainstream media narratives and examines the historical impact on interest rates. Potential effects on treasury yields are closely analyzed, alongside the influence of government spending on inflation. The implications for the more vulnerable members of society are significant, emphasizing the need for awareness about economic health.
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Debt Downgrade Signals Unsustainability
- Moody's downgrade confirms the US debt is unsustainable due to exploding deficits and required Fed intervention.
- This will likely intensify inflation and pressure the US dollar as the release valve.
Misplaced Blame on Debt Causes
- Downgrade fears often drive expectations of higher interest rates due to increased credit risk.
- Yet, blaming one administration oversimplifies complex deficit and debt causes.
Downgrades Do Not Spike Rates
- Past downgrades in 2011 and 2023 did not cause sustained interest rate spikes as commonly believed.
- Market reactions are often knee-jerk and rates usually retreat, undermining mainstream narratives.