Us treasury secretary janet yellen called the downgrade arbitrary and said Economic Conditions had improved under the biden administration. The news of the downgrade came after the close of trade on wall street but in asia investors have been pulling out of equities in reaction. Lets look at markets now in asia. Japan is currently down by over 2 . Hong kong not that far behind. This was off the back of yesterday, and most of this week we have seen the sharemarket, certainly wall street and asia having a strong session but this is certainly spooked sentiment. Lets discuss this with tom stevenson, whos an Investment Director at fidelity. Good morning. Janet woody allen saying this is arbitrary. I have her statement janet yellen and she said she strongly disagrees and says it is based on outdated data. That is based on outdated data. That is riuht. Is based on outdated data. That is right it is based on outdated data. That is right. It seems is based on outdated data. That is right. It s
Picture in germany and france. Claim of their implications. Francis of their implications. Francis female coppola joins us. Janet yellen says this is arbitrary, is it . I yellen says this is arbitrary, is it . 4 yellen says this is arbitrary, is it . ~. , yellen says this is arbitrary, is it . 4. , yellen says this is arbitrary, is it . ~. , , yellen says this is arbitrary, is it . 4. , ,. , it . I think what she is oining us is showing it . I think what she is oining us is showing a h it . I think what she is joining us is showing a deterioration it . I think what she is joining us is showing a deterioration in it . I think what she is joining us l is showing a deterioration in fiscal governance and asked two decades, so this isnt about what has happened on her watch, its work were also about repeated stand offs on the debt ceiling and short termism in fiscal Spending Plans going back a long time. find fiscal Spending Plans going back a loni time. , fiscal Spending Plans going back
Notice, blaming the stand off over the debt ceiling which was ultimately lifted any last minute bipartisan deal. The feud was cited by fitch is one of the reasons for the downgrade. Make no mistake, this is a major black eye for america. The us treasury, essentially government ious are seen as the bedrock of the Global Financial system. Fitch is essentially pointing out there is an erosion of trust in american leadership. Given the death and perceived safety of us treasuries, this downgrade is not likely to change its role in the financial system. Likely to change its role in the financialsystem. It likely to change its role in the financial system. It could, likely to change its role in the financialsystem. It could, however, make it potentially harder and more expensive for the government to borrow in the future. Right now the Us Government owes 30 trillion in debt. Fitch is highlighting that the Us Government has too much debt doesnt have a way to bring it down. And at washington at
Remember thatjust like most americans who have credit records when they want to borrow money and find out how much debt they can take on, the Us Government also gets a credit rating. When it gets downgraded like this, the potential long term effect as it could push up the cost for the Us Government of borrowing money, and in turn that might long run push up taxes, it could mean less spending by the government and could mean fewer government and could mean fewer government programmes in the future. We are not there yet, but that is the underlying fear. If you look at what they are trying to address here in this downgrade, or one of the concerns they cite, it is a problem that exists both in the past but also in the future, and that is rising Us Government debt. At the moment Us Government debt stands at in excess of 30 trillion and it is expected to exceed the total size of the us economy at some point. With that in mind, with this problem in sight, and with the political disunity we ha
major world economy. it s also one of the major leading players in the group of emerging economies who are talking up the idea of a common trade currency to counter the dollar. so, could they become the trading block of the future? i m going to be discussing all of that and more with these two. there they are. the man who first coined the phrase the brics, and a former central bank economist from brazil. also on the show, shining bright like a diamond. yeah, the shiny rocks have been one of the big winners post pandemic. but can they keep their lustre in a shaky global economy? i m catching up with the big boss of the world s biggest diamond supplier. wherever you rejoining me from around the world, once again, a big hello, and a warm welcome to the show. you know, back in 2001, a directorfrom goldman sachs, jim o neill, now lord o neill, coined the phrase the brics, an acronym for what he gauged were the countries with the highest growth potential that would dominate the glo