The U.S. Federal Reserve initiated more economic stimulus. And the very next day the U.S. Government received another debt downgrade.
Did one lead to the other- or is there more to the story?
Amid last week’s headlines of Islamic terrorist attacks and domestic bomb threats, the news about another U.S. debt downgrade may have seemed anticlimactic. Yet this additional downgrade for the U.S. has been a long time in the making, has long-term ramifications, and was not triggered by the Federal Reserve alone.
After months of speculation, pressure, and mostly bad economic data, Federal Reserve Chairman Ben Bernanke announced last Thursday that he would launch a third round of economic stimulus code-named “QE3