"We do not believe that there are any meaningful holders of Treasury securities who will be forced to sell due to a ratings downgrade," Goldman Sachs economist Michael Cahill said in a Thursday note."And, by definition, there is limited supply of AAA sovereigns elsewhere."
In fact, the countries that have top scores at the three main ratings agencies include the likes of Germany, Denmark, Netherlands, Sweden, Norway, Switzerland, Luxembourg, Singapore and Australia. And their debt markets aren't as deep or liquid as the one for US Treasurys. "Investors still need to turn to Treasuries when they need safety in a hurry. For similar reasons, the dollar remains the safe-haven currency in a yields up, equities down market, which was a key part of the dollar's outperformance in 2022," Cahill added. rose 0.30% while stocks fell in the aftermath of the Fitch debt downgrade.
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