A small majority of economists — 30 out of 53 — surveyed over the past two days said the United States will lose its AAA credit rating from one of the three big ratings agencies — Standard & Poor’s, Moody’s or Fitch.
Respondents saw a 20 percent chance of a new recession over the next year, a prospect that some economists say has been compounded by the acrimonious political fight over what is normally a procedural legislative vote on the debt…
Downgrade and default would have vastly different consequences. A ratings cut might raise the risk of recession by hurting confidence, but might allow financial markets to muddle through the next few months without incident. A default, however, would send shockwaves through the global financial system that could kick-start a new financial crisis, say analysts.
Even if this worst-case scenario is not borne out, a firm majority of respondents — 38 out of 54 — said the uncertainty brought about by the political acrimony over the debt has already hurt economic growth.
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