As Senate President John Cullerton told reporters in Springfield on Wednesday, "We're going to feel some pain now."
Not yet, but it's coming soon. A downgrade to junk status would prevent many mutual funds from buying Illinois. The real pain comes when nobody shows up to buy its debt.
Headline: S&P, Moody's Downgrade Illinois to Near Junk, Lowest Ever for a U.S. State
Illinois had its bond rating downgraded to one step above junk by Moody’s Investors Service and S&P Global Ratings, the lowest ranking on record for a U.S. state, as the long-running political stalemate over the budget shows no signs of ending.
S&P warned that Illinois will likely lose its investment-grade status, an unprecedented step for a state, around July 1 if leaders haven’t agreed on a budget that chips away at the government’s chronic deficits. Moody’s followed S&P’s downgrade Thursday, citing Illinois’s underfunded pensions and the record backlog of bills that are equivalent to about 40 percent of its operating budget.
Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.