“Shark Tank” judge Kevin O’Leary warned of potential fallout from Fitch’s U.S. credit-rating downgrade, impacting the dollar and Treasury bills, during a show on Fox News, Business Insider reports.
Fitch Ratings has downgraded the U.S.’s sovereign credit rating from AAA to AA+, citing governance issues and debt trends. This is the second downgrade the US has ever received, the first being S&P Global’s 2011 downgrade.
O’Leary expressed concern about the downgrade’s implications.
“There’s no way to sugarcoat this at all. It’s bad. Basically, when you downgrade the US economy — which is what this downgrading is — you are losing a little faith in the US dollar and the US Treasury bill,” he said.
He believes the downgrade could lead sovereign wealth funds to reconsider their dollar holdings. The downgrade also implies a higher cost of borrowing for the US, deepening federal deficit spending.
However, some Wall Street analysts, including JPMorgan CEO Jamie Dimon and Allianz’s Mohamed El-Erian, downplayed the downgrade’s significance.
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