What will be the ratings cut impact on US markets? Arnab Das explains

economictimes.indiatimes.com:

«Look, I think it is going be a little bit of the turbulence that we are seeing for the very short term. But it is going to pass under the water, like water under the bridge, because it is not really a credit risk problem that the US has,» says Arnab Das, EMEA, Invesco.What do you think the ratings cut impact will have on US markets and, of course, on emerging markets? Look, I think it is going be a little bit of the turbulence that we are seeing for the very short term. But it is going to pass under the water, like water under the bridge, because it is not really a credit risk problem that the US has.

The markets are going to trade, I think US markets and indexes in general are going to trade on macro factors much more than this kind of question of the sovereign creditworthiness per se of the US. I think it is having a bit of turbulent effect on the markets because people had sort of put this out of their minds for the time being because the debt ceiling debate had been put to bed perhaps better than most people had expected. And then the next milestone was going to be the shutdown issue.

And so this had sort of left the mind of the market and sort of came as a bit of a surprise because of the timing, as many people have said. I think if you step back and look at rating downgrades of major governments in the past, you do not really get much of a lasting effect. It is really countries that are facing a refinancing problem or a default problem where there really is a sovereign creditworthiness issue at stake.