Updated on
Summary Rating cut have broad impact on Asian markets, especially Pakistan, say experts.
Standard and Poors cut its outlook on US government debt to negative, which could have broad implications for investors and the economy.Stock markets are selling off aggressively after ratings agency Standard and Poors downgraded its credit outlook for the United States to negative, warning there is at least a one-in-three chance the US could lose its stellar AAA credit rating in two years.The risk a ballooning federal deficit poses to investors of US government debt unsettles Mohamed El-Erian, head of PIMCO, the worlds largest bond fund, which recently sold all its US government debt holdings. A downgrade would be far reaching, warns El-Erian.Analysts say a credit outlook downgrade doesnt mean a rating cut will actually come - but the threat may be enough to get lawmakers to come up with a plan - before Wall Street forces it to.
