Stock markets drop after US credit rating downgraded by Moody’s – business live

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Mohit Kumar of investment bank Jefferies predicts Moody’s downgrade will only have a “limited near term impact” on the markets, explaining:

For one, Moody’s was already above its peers from S&P and Fitch and the rating downgrade brings it in line with the other rating agencies.

Second, the move was not totally unexpected. We have been in the camp that we need to price in a higher risk premium for the US long end [ie longer-dated bonds].