A Bloomberg survey of 1,031 subscribers found that 57 percent of U.S. investors agreed with S&P's decision, compared with about 75 percent of those in Europe and Asia. The quarterly review showed that 72 percent of U.S. investors found the nation's creditworthiness good or excellent, while 45 percent of Europeans agreed and 42 percent of Asians.

While most of those polled backed S&P's downgrade, 35 percent of investors said that overall the grades given by rating firms aren't reliable. Only 1 percent called them very reliable, 18 percent fairly reliable and 45 percent just somewhat reliable.

Budget Deficit

The U.S. budget deficit through Aug. 31 was $1.2 trillion, a month before the end of the fiscal year. The deficit for fiscal 2010 was $1.3 trillion after a record $1.4 trillion in 2009. Moody's Investors Service and Fitch Ratings affirmed their top rankings on Aug. 2, after President Barack Obama and Congress avoided default by agreeing to lift a limit on borrowing. Investors have bid a record $3 for every dollar of debt sold at the $1.6 trillion in Treasury auctions this year.

The average 10-year yield forecast for 2011 among primary dealers, who underwrite the U.S. debt and serve as counterparties to the Fed in its open-market operations, was 3.65 percent at the start of the year, with a low projection of 2.2 percent by HSBC Holdings Plc.

Demand from funds is likely to help keep yields near record lows, said Eric Pellicciaro, head of global rates investment at New York-based BlackRock Inc., which manages $1.14 trillion in fixed-income assets.

"Treasuries are still an underinvested asset class," mostly because the "Fed has hoarded" the securities, Pellicciaro said in a Sept. 28 telephone interview.

Government securities made up 27 percent of the $3.4 billion BlackRock Core Bond Fund portfolio as of Aug. 31, up from 20 percent as of July 31.

The Fed's decision to purchase $600 billion of Treasuries through last June prompted money managers to sell them to buy riskier assets such as stocks, "exactly as the Fed wanted to see happen," Pellicciaro said. "There hasn't been enough time between these Fed operations for supply to build up enough for money managers" to boost their Treasury holdings, he said.

The central bank is the largest holder of Treasuries with $1.7 trillion of them on its balance sheet. The Treasury sold $2.2 trillion of notes and bonds in 2010.