Wall Street’s reaction to Moody’s downgrade of U.S. debt is turning into a tale of two titans. On one end, you have Ray Dalio — founder of Bridgewater Associates — warning that the downgrade grossly understates the true risk of owning U.S. debt.
On the other hand, there’s Tom Lee of Fundstrat. Lee brushed the downgrade off as a “non-event” and told investors to go shopping for stocks.
Moody’s cut the U.S. credit rating from Aaa to Aa1, following in the footsteps of S&P in 2011 and Fitch in 2023. With this move, the U.S. officially loses its AAA status across the board.
But is it a flashing red signal or just another headline?