Photograph by Scott Eells/Bloomberg
U.S. Falls From Grace
It wasn't quite the Scarlet Letter, but it felt like it. On Aug. 5, Standard & Poor's downgraded the U.S.'s AAA credit rating for the first time. The company slammed the nation's political process and criticized lawmakers for failing to cut spending or raise revenue enough to reduce record budget deficits. S&P lowered the U.S. one level, to AA+, while keeping the outlook "negative." U.S. Treasury debt had carried an AAA rating since 1941. Still, Treasury debt hasn't exactly been shunned: The nation's cost to borrow has fallen to record lows since S&P said the U.S. was no longer risk-free. In November, the average monthly yield on 10-year notes fell below 2 percent for the first time since 1950.