Will the S&P Downgrade Affect Interest Rates?

Standard & Poor downgraded the U.S.'s credit rating on Friday, despite Congress reaching a deal in the final hours on the debt ceiling crisis last week. And now many of your customers may be asking: What does this mean for interest rates?

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The cost of borrowing money is likely to go up,” the Washington Post explained in the after the decision.to downgraded the U.S.'s top-notch AAA credit rating for the first time in history, moving it down to AA+; the rating reflects a downgrade in S&;P’s confidence in the U.S. government’s ability to repay its debts over time. It’s not clear, however, whether S&P’s downgrade will instantly effect rates, analysts say. At the same time, why worry? Take advantage of Daily deals on the city's best stuff only from Groupon. Restaurants, spas, events & more, 50%-90% off!

The 10-year Treasury note is considered the basis for all other interest rates. And “the downgrade could increase the yields on those bonds, forcing the government to spend more to borrow the same amount of money,” the Washington Post article notes. If you need information on loan modifications simply Call Now: 877-846-2701 “Many consumer loans, such as mortgages, are linked to the yield on Treasurys and therefore would also rise.”