US bond managers brace for downgrade

The United States has avoided a default on paying its debts thanks to a last-minute deal forged between the two political parties on Sunday. But bond-fund managers warn that a downgrading of America’s credit rating by at least one of the three major credit-rating agencies remains on the table. According to textbook financial theory, such a downgrade should have an immediate impact on pricing and on credit spreads that use US Treasuries as their benchmark. That would suggest yiel…