The United States lost its top-notch AAA credit rating from Standard & Poor's on Friday, in a dramatic reversal of fortune for the world's largest economy.

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits.

COMMENTS:

STEVE BLITZ SENIOR ECONOMIST ITG, NEW YORK

I don't know how seriously everyone is going to take it. There is S&P and there is Moody's and we don't know if Moody's is going to follow with a downgrade of its own.

If you think about the things they have rated AAA over the past few years, then you think about the U.S. economy with 15 trillion dollars of income every year and it's never not paid its debt.

I think maybe S&P is under a lot of heat. I think the other side of it is they are also ready and willing to downgrade the whole financial system because the whole financial system holds its capital in Treasuries and it leverages itself off of that capital.

WILLIAM LARKIN, FIXED INCOME PORTFOLIO MANAGER, CABOT MONEY
MANAGEMENT, SALEM, MASSACHUSETTS:

When they finally dealt with the debt ceiling they obviously kicked the can down the road, and the market did not need that. I thought at the time when they released it there would have been a downgrade.

I don't think it is a great shock. If it didn't happen now I think it probably would have happened in a couple of months.

A double-A plus is not a big issue, but it is going to have an impact. There are going to be ripples going across the pond.