Americans will take hits in their wallets and their retirement portfolios from S&P’s decision to yank Uncle Sam’s stellar AAA credit rating.
Gas could go up by as much as a dollar a gallon — and consumer loan rates may rise an extra 0.5 percent, financial pros say.
IRAs, 401(k)s and other retirement savings and investment accounts could plunge another 10 percent in value, estimates financial analyst Richard Bove of Rochdale Securities.
“It no different than the value of your home going down. It’s just another hit to the American consumer,” Bove said.
Not everyone sees such a big impact on stock prices. Some Wall Street traders and bankers told The Post that they anticipate a fairly muted response, since the market already shed $2.3 trillion globally in last week’s roller-coaster trading.
But Americans can expect higher prices for many goods and services. Higher interest rates on US government securities will bring higher borrowing costs to big businesses — costs that businesses will pass on to consumers.
A $1-per-gallon increase in the price of gasoline could be pushed by a possible $25 jump in the price of a barrel of oil. Oil prices are now about $87 a barrel, after peaking at around $120 this spring.
It’s bad news for those in the market for a mortgage, as the S&P decision could boost the rate on a 30-year loan from the current average 4.5 percent to 5 percent. That means a $350,000 mortgage would cost an extra $100 a month.