12 key points to consider on the debt ceiling and the markets
Is another downgrade of the US sovereign credit rating likely? What would that mean for fixed-income pricing?
If a technical default were to occur, the Wells Fargo Investment Institute thinks credit rating agencies would probably lower their ratings. Near-term implications would not be as evident, as Treasuries are still regarded as a safe haven. In fact, the institute said Treasury securities would most likely rally, with prices rising and yields declining, in a period of risk aversion. But longer term, investors might want higher rates to hold Treasuries and foreign investors might have less interest.