American credit rating agency Fitch Ratings Inc., one of three major independent rating agencies in the market, on Tuesday, cut the US government’s credit rating from the top level of AAA to AA+.
“In Fitch’s view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025,” Fitch stated.
US Treasury Secretary Janet Yellen was unhappy, and said the downgrade was “arbitrary” and based on “outdated data.”
White House Press Secretary Karine Jean-Pierre said, “It defies reality to downgrade the United States at a moment when President Biden has delivered the strongest recovery of any major economy in the world.”
Does it, though?
The Fitch credit rating of Israel is A+, with a Stable outlook.
Fitch flagged the chance of a downgrade in May when Congress was fighting over the US debt ceiling. In June, after the debt ceiling had been raised to $31.4 trillion, Fitch said it still intended to review its US rating because of the drawn-out political fight.
Following Fitch’s, the dollar fell against many currencies, including the shekel (from NIS 3.71 to 3.66), stock futures sank and Treasury futures rose.
Back in 2011, after another debt ceiling crisis, Standard & Poor’s cut the US top ‘AAA’ rating down to A+.
