Facts vs Feelings with Ryan Detrick & Sonu Varghese

You’re Downgraded (Ep. 46)

Aug 10, 2023

This podcast discusses Fitch's downgrade of US debt, its implications on investments and interest rates, and the strength of treasury yields. The hosts also touch on their personal experiences with baseball, the role of credit ratings, speculations on Fitch's actions, and an upcoming financial advisors conference. They explore the relationship between income, consumption, and the economy, highlighting positive economic indicators.

36:10

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Quick takeaways

Fitch downgraded US debt due to fiscal deterioration and governance concerns, highlighting potential impact on interest rates and investments.

Rising treasury yields can be attributed to the Fitch downgrade, expectations of better economic growth, and the Federal Reserve's management of inflation and interest rates.

Deep dives

The Downgrade of US Debt by Fitch

Fitch recently downgraded US debt from AAA to AA+, citing expected fiscal deterioration, high growing government debt burden, and erosion of governance relative to peers. The downgrade highlights concerns about the US debt levels and the potential impact on interest rates and investments.

Introduction

2min

Baseball Experiences and Connections to Wrigley Field

2min

Downgrade of US Debt and the Role of Credit Ratings

17min

Speculating on Fitch's Actions and Excitement about Nashville Conference

2min

Financial Advisors Conference and High Yields

12min

Income, Consumption, and Economic Backdrop

2min

One topic that has garnered attention this week is Fitch's decision to cut the US credit rating.

This move has had implications for investments, interest rates, and overall market sentiment.

Want to learn more?

In this episode, Ryan Detrick & Sonu Varghese explore the recent downgrade of US debt by Fitch, its implications, and market reaction. Ryan and Sonu also touch on gridlock in Washington, macro policy performance, and the positive outlook on the economy. Additionally, they analyze the current state of the labor market and its impact on the economy.

Ryan and Sonu discuss:

The Fitch downgrade of US debt and the reasons behind it
The improvement in the debt to GDP ratio and the concerns about governance quality in Washington
The Fed's credibility and their response to the highest inflation in 40 years
The factors contributing to the rise in treasury yields and the impact of Fitch downgrading debt
Various positive economic indicators
Prime age employment population ratio: What you need to know about the low layoffs rates and strong hiring which indicate a tight labor market
And more!

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