However, he acknowledges that it may reinforce concerns over the US’s growing budget deficit and debt. While these issues aren’t new, they have been discussed “extensively” for the past few months, and even years, he adds.
Vasu Menon, managing director of investment strategy at OCBC, remains positive over the US investment outlook for the next 12 months despite Moody’s downgrade on Friday.
“Moody’s latest rating downgrade on its own may not cause a big sell-off in US stock and bond markets as we have seen from the 2011 and 2023 rating downgrade episodes,” he says in a May 18 note.
