“U.S. policy makers may have stumbled into the right mix of fiscal drag without excessive austerity,” Jake Lowery, a money manager at ING U.S. Investment Management, which oversees $120 billion of fixed-income from Atlanta, said in a July 31 telephone interview.

Downgrades Repudiated

Downgrades don’t always result in higher borrowing costs. In 53 percent of 32 changes in credit outlook last year, yields on government securities moved in the opposite direction from what ratings suggested, according to data compiled by Bloomberg and published in December on Moody’s and S&P grades.

Bond markets shouldn’t be expected to react when a country’s credit rating is changed because sovereign-debt yields reflect more than just the credit risk on which rankings hinge, such as the outlook for changes in interest rates, according to Fitch Ratings, which has maintained its top grade for the U.S., with a negative outlook.

The chief credit officer Moody’s, Richard Cantor, said last year that “we have only one objective, which is to assign ratings that are indicative of the relative risk of default and losses.”

Debt Ceiling

Political wrangling over the nation’s borrowing limit continues. Treasury Secretary Jacob J. Lew told Congress on Aug. 2 that he’s extending a measure that enables the U.S. to stay under the $16.7 trillion debt ceiling, as the Obama administration and Republican lawmakers remain in a stalemate on raising the limit.

Lew told congressional leaders in a letter that he is extending until Oct. 11 a “debt-issuance suspension period” that was to expire last week. The step, one of the so-called extraordinary measures the Treasury takes allowing it to maintain its borrowing ability, doesn’t necessarily mean the debt limit will be reached Oct. 11, the last day Congress is in session before a Columbus Day recess.

“I respectfully urge Congress to protect America’s good credit and avoid the potentially catastrophic consequences of failing to act by increasing the debt limit in a timely fashion,” Lew said in the letter, which was released by the Treasury Department.

As recently as five months ago, S&P suggested that it felt the nation’s creditworthiness was in doubt. John Chambers, managing director of sovereign ratings at the firm, told Bloomberg Television on March 1 that “they’ll catch up to us,” referring to other credit-rating firms.