What a Ratings Downgrade Would Mean for Investors

It may not be as big of a deal as you think.

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What's more, the U.S. government doesn't really control its own destiny when it comes to the treasury market. "Half the U.S. treasury market is held by foreigners now, principally Asian [countries] ... and how they see things is increasingly important," Randolph says. The Chinese government alone holds more than $1 trillion worth of treasury securities. If countries like China were ever able to find another place to invest their money, that's when investors should really begin to worry about higher interest rates.

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