The downgrade of the U.S. credit rating will also likely force ratings cuts on bonds issued by cities and states. That could raise municipality borrowing costs.
Sharp stock market drops of late are reminiscent of the 2008 crisis — and that's put investors on edge. But the roots of our current economic turmoil are much different than the causes of the last recession.
Yesterday was one of the worst days for global stock markets since the 2008 collapse of Lehman Brothers. A sell-off in European markets continues today.
The Federal Reserve bank is scheduled to meet this morning. One thing the Fed could do is a third round of quantitative easing — but analysts say not to expect any major policy moves this afternoon.
The difference between now and three years ago may be more in cause than in effect. The first crisis was fueled by Wall Street — this one, some analysts argue, was caused by the government's mishandling of the debt crisis.
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