Fitch cuts US credit rating to AA after debt limit standoffs; cites expected fiscal deterioration over next three years
livemint.comJoe Biden and the Republican-controlled House of Representatives reached a debt ceiling agreement that lifted the government's $31.4 trillion borrowing limit. “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," the rating agency said in a statement.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management," it said. Earlier, Standard & Poor’s (S&P) had also downgraded the US credit rating.
Meanwhile, US Treasury Secretary Janet Yellen, disagreeing with Fitch's downgrade, called it “arbitrary and based on outdated data." The White House also said it “strongly disagrees with this decision". US Treasury yields declined in Tokyo on Wednesday after the credit rating downgrade by Fitch lowered.
The 10-year Treasury note declined about 3.2 basis points (bps) to 4.015%. (With inputs from Reuters)Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!
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