(Image Source: Los Angeles Times)

BY ZACH TOOMBS

ANCHOR: ALLIE SPILLYARDS

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Three days after downgrading the U.S. credit rating, Standard & Poor’s downgraded federal mortgage finance agencies Freddie Mac and Fannie Mae from their perfect Triple-A credit status to AA+.

MSNBC’s Andrea Mitchell gives the report.

“And the fragile economy is taking more hits today after the S&P downgrade, which has now been extended to Freddie Mac, Fannie Mae and other institutions. All this is more bad news for people already struggling to make ends meet and find jobs." 

The downgrade also extended to 10 of the 12 federal home loan banks propped up by the U.S. government after the 2008 financial crisis.

Politico has the agency’s statement.

“The downgrades of Fannie Mae and Freddie Mac reflect their direct reliance on the U.S. government... Fannie Mae and Freddie Mac were placed into conservatorship in September 2008 and their ability to fund operations relies heavily on the U.S. government." 

And the U.S. stock market reacted Monday, with the Dow Jones Industrial Average plummeting more than 600 points.

The drop put the Dow below 11,000 for the first time since November of last year. Bloomberg says the downgrade’s possible long-term effects on the economy are still unclear.

“This could be important, if it significantly raises their costs. There are a lot of questions about how that will affect those two agencies now because they are part of the U.S. government, not just guaranteed buy, but they are part of the U.S. government. But if it raises their borrowing costs and what they have to pay to raise money to buy mortgages, it could raise mortgages a little bit." 

Another question is whether the U.S. could join the ranks of the five countries that have regained their perfect AAA statuses.

CNN weighs in.

Kyra Phillips: “I think a lot of people are asking too, ‘Is it possible for the U.S. to even get its AAA rating back?’”

Allison Kosik: “It is possible, but, you know, it doesn’t happen automatically. I mean, you look at how other countries have fared. Five countries have lost and then regained their AAA status, including Canada, Australia. But, again, the caveat is that it takes time." 

With markets taking a tumble, President Obama took to the television defending US credit and holding on to an optimistic outlook for the economy.

Fox Business has his comments.

“Markets will rise and fall, but this is the United States of America. And no matter what some agency may say, we’ve always been and always will be a Triple-A country. For all of the challenges we face, we continue to have the best universities, some of the most productive workers, the most innovative companies, the most adventurous entrepreneurs on Earth." 

Some analysts warn that credit ratings for state and local governments could be next on the S&P chopping block.

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Transcript by Newsy.