Thus, higher interest rates could harm economic recovery. Second, an actual downgrade would have severe implications for the Chinese economy because it is the largest holder of US debt abroad. Another...

Thus, higher interest rates could harm economic recovery. Second, an actual downgrade would have severe implications for the Chinese economy because it is the largest holder of US debt abroad. Another consequence of a downgrade of Treasuries, according to some analysts, is that stocks could benefit from such a decline in demand from Treasuries (as bonds would be worth less if rates climbed).