Yesterday, perhaps lost in news of the latest Trump indictment and the MLB trade deadline, Fitch Ratings (which is, along with S&P and Moody’s, one of the big three credit rating services) downgraded US Treasury securities one notch from the highest category, AAA.

The Fitch downgrade comes a dozen years after S&P did the same thing, leaving Moody’s as the only AAA holdout.

This might have been a big deal if the downgrade had come, say, a half-decade ago, before Xi began to blow up the Chinese economy. Back then, the world might have seen some form of renminbi as an adequate substitute. Maybe cryptocurrency would have been the big beneficiary.

And, yes, the US has third-world public infrastructure, a dysfunctional Congress, a resutling big budget deficit, and a major political party that believes the wrong side won the Civil War. But there really is no substitute for the dollar.

Hence, the ho-hum reaction in financial markets.

One issue (of the many) I know nothing about is whether this makes trouble for professional fixed income investment managers who offer products whose prospectuses say they hold only the safest securities. At the time of the S&P downgrade, ultra-safe was defined as having a AAA rating. After the S&P downgrade, managers said that really counted was that a majority of the rating agencies said Treasuries were AAA, not that the rating was unanimous.

On the same logic, Treasuries are now sub-AAA. This is an issue pretty much like the individual stock weighting issue for NASDAQ-linked index funds. Presumably, seeing the mess Washington has pretty consistently continued to make, prospectuses have long since been changed in anticipation of an ultimate downgrade.