S&P's Chambers: 1-in-3 Chance of Further US Downgrade

WASHINGTON — Standard & Poor's Managing Director John Chambers said Sunday there is a 1-in-3 chance of a further U.S. credit rating downgrade over the next six months to two years.

"We have a negative outlook . . . from six months to 24 months," he said on ABC's "This Week."

"And if the fiscal position of the United States deteriorates further or if the political gridlock becomes more entrenched, then that could lead to a downgrade. The outlook indicates at least a one in three chance of a downgrade over that period."

Chambers said that it would take some time for the United States to recover its AAA rating.

"It would take a stabilization of the debt as a share of the economy and eventual decline. And it would take, I think, more ability to reach consensus in Washington than what we're observing now," he said.

 Meanwhile, former Federal Reserve Chairman Alan Greenspan said he expects the stock market slide to continue in the wake of a decision by S&P to downgrade the U.S. credit rating.

Appearing Sunday on NBC's "Meet the Press," Greenspan said markets will take time to bottom out and that he expects a negative reaction on Monday to the S&P action.

But Greenspan also said he doesn't see any risk in investing in the United States and says that S&P's downgrade won't change that.

The former Fed chairman said the downgrade "hit a nerve" and is damaging to the psyche of the country. But he said he can't foresee a scenario in which the U.S. will default on its debts.