“More than two years after the beginning of the recent crisis, U.S. policy makers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures,” said Standard & Poor’s credit analyst Nikola G. Swann.
If a meaningful agreement to address medium- and long-term budgetary challenges isn’t reached and implementation isn’t begun by 2013, it would render the U.S. fiscal profile meaningfully weaker than its AAA-rated peers, analysts said.
“This is killing stocks and bonds,” said David Ader, head of government bond strategy at CRT.
Indeed, it has - but the gold market loved it. Shaking off the hex that condemned the metal to some downward volatility after a good start to the pit session, gold shot up to a new record on the outlook news. Stuck at $1,482 when the news was released at 9 AM ET, the metal leapt to $1,496 within fifteen minutes. After a slump back to $1,488, it surged higher to reach its new record of $1,498.90. The next pullback brought it down to $1,490 but that reversed too.
Interestingly, the greenback recovered from the swacking it took from the outlook news.