S&P's decision to downgrade U.S. debt is having widespread repercussions including a big upswing in U.S. Treasury buying, but investors will see two longer-term effects that will hurt Treasuries, says Patrick Faul, vice president of credit research at Calvert Investment Management.

Treasuries are rallying now, as investors seek a safe haven from volatile equities. But after the dust settles, Faul notes in a blog, those who are obligated to only hold AAA-rated debt will have to sell. "In a vacuum, we would expect this forced selling to push the prices of Treasuries down and push up the prices of remaining AAA securities," he said.

The second effect, which will take longer to observe, will be that Treasuries will no longer be viewed as a "riskless" asset, Faul adds. "In the back of every investor's mind, there will now be a slight reservation about the safety of Treasuries."

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