US PRESIDENT BARACK Obama has said that the US will “always be a triple-A country despite what rating agencies say”.
The president has made his first public comments since the ratings agency Standard and Poor’s lowered the US government’s credit rating on Friday.
The agency said it wasn’t happy with the plan Congress came up with earlier in the week to reduce the country’s debt.
Obama said:
We didn’t need a rating agency to tell us that the gridlock in Washington over the last several months has not been constructive.
He said that the government knows what to do to solve the country’s economic problems, and he renewed a plea to Congress to take action in September to help create jobs and cushion Americans from a still weak economy.
Obama called the action by Standard and Poor’s a “warning” and called for an extension to payroll tax cuts as soon as possible “so that workers have money in their paychecks next year”.
As the president was speaking the Dow Jones was falling. It was down 394 when he started speaking, and went as low as 500 points down. At the time of writing was down 446.
Earlier US stock markets were in virtual freefall in the wake of the downgrade, while demand for bonds surged as investors moved to dump shares.
The ECB’s decision to buy Spanish and Italian bonds did bring some stability to the bond markets, however the FTSE closed down 3.4 per cent, its lowest closed since July 2010, according to the BBC. Frankfurt was down more than 5 per cent and Paris closed down 4.4 per cent.
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