Erin Burnett: debt deal may lead to downgrade, increase in interest rates

CNN anchor Erin Burnett talks with Wolf Blitzer about Standard & Poor’s and the credit rating agencies need for more cuts than $2.4 trillion in the debt deal to avoid a potential downgrade of U.S. economy from AAA rating.

If a downgrade occurs, Burnett says, “[PIMCO’s Bill Gross] thinks that over the longer term, the increase in interest rates could be between a quarter of a percent and half a percent. And that is the borrowing cost for the U.S. government and also, Wolf, the borrowing cost for consumers to varying degrees it would affect mortgages, fixed rate mortgages particularly credit cards, auto loans, all of those to varying degrees.”