Forbes & Sierra CIO St. Aubin on the Implications of Recent U.S. Bond Rating Downgrade

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Fitch Ratings took away America’s triple-A credit rating this week, but it could not downgrade the almighty dollar.

The No. 3 U.S. credit rater joined larger rival Standard & Poor’s — after more than a decade — in cutting Treasury bonds from AAA to AA+ on Wednesday, citing well-known economic and political issues that weigh on the country’s finances, particularly a debt measure that is more than twice the amount of similarly rated countries.

Indeed, the dollar’s popularity with overseas investors and governments—it accounts for 60% of official reserves around the the world, according to S&P—gives the U.S. a “license to be irresponsible,” according to Martin Fridson, chief investment officer at Lehmann, Livian, Fridson Advisors and editor of the Forbes/Fridson Income Securities Investor newsletter.

The thoughts and opinions expressed in the article are solely those of the person speaking as of 8/4/2023, and not necessarily those of Sierra and are provided for informational purposes only. Any opinion or estimate contained in this article is made on a general basis and is not to be relied upon by the reader as advice. The reader must make his/her own assessment of the relevance, accuracy, and adequacy of the information contained in this article, and make such independent investigations as he/she may consider necessary or appropriate for the purpose of such assessment.

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