Moody's shifts US credit outlook to 'negative' | Experts weigh in on market impact

In response to the downgrade, Neeraj Gambhir, Group Executive & Head-Treasury, Markets and Wholesale Banking Products at Axis Bank, and Steven Englander, Global Head of G10 FX Research and North America Macro Strategy at Standard Chartered, shared their insights with CNBC-TV18.

| Moody's cuts USA's credit outlook to negative on rising interest rate and political polarisation

Englander noted that the market has already absorbed downgrades from other agencies, suggesting that Moody's downgrade may not significantly impact the US market. He emphasised that the longer-term impact depends on how inflation and fiscal policies unfold. In the short term, he anticipates a slowdown in the US economy, leading to relief as the 10-year yield approaches 4.50-4.25%.

Gambhir echoed concerns about a potential slowdown in the US economy and discussed the uncertainty surrounding US yields. He mentioned, "It's hard to take a definitive view on this because data is evolving and the situation keeps changing, but my guess is that somewhere between 4.5-4.75% is a good range for the short term. In the longer term, we will have to see how the inflation story settles down and how the growth story evolves from here."

Also Read | Moody's upgrades Jaguar Land Rover's ratings, sees 'wholesales' rising further

(with inputs from agencies)

For the entire discussion, watch the accompanying video