Barclays Wealth: What we are telling clients on the US

The 5 August downgrade by Standard & Poor's of the long-term sovereign credit rating of the US from AAA to AA+ has sent markets on both sides of the Atlantic into freefall. Uncertainty over what will happen next has helped fuel the sell-offs. Aaron Gurwitz, chief investment officer at Barclays Wealth, has revealed what he is telling clients post-rating cut: Will Treasury bond yields rise in response? Not necessarily. If investors were concerned about the credit quality of US debt, yields would have risen. Exactly the opposite happened. Worries about potential default by sovereig...