As expected, S&P downgraded the US Government’s sovereign credit rating from AAA to AA+. Last month, S&P indicated that debt ceiling negotiations would need to result in US$4 trillion in budget savings over ten years in order to stabilise the country’s debt to GDP ratio. Ultimately the debt ceiling negotiations only delivered between US$2.1 and US$2.4 trillion in savings. S&P has remained true to its word, following through with a US credit rating downgrade.

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