Fitch cuts US credit rating to AA+ from AAA after debt limit standoffs; White House “strongly disagrees”

  • Fitch’s move comes two months after Democratic President Joe Biden and the Republican-controlled House of Representatives reached a debt ceiling agreement that lifted the government's $31.4 trillion borrowing limit.

Livemint
Updated2 Aug 2023, 08:28 AM IST
In May, Fitch had placed its “AAA” rating of US sovereign debt on watch for a possible downgrade, citing downside risk.
In May, Fitch had placed its “AAA” rating of US sovereign debt on watch for a possible downgrade, citing downside risk.

Rating agency Fitch on Tuesday downgraded the US government's top credit rating citing expected fiscal deterioration over the next three years and growing general government debt burden.

Fitch downgraded the United States' Long-Term Foreign-Currency Issuer Default Rating (IDR) to AA+ from AAA, in a move that came despite the resolution of the debt ceiling crisis two months ago.

In May, Fitch had placed its “AAA” rating of US sovereign debt on watch for a possible downgrade, citing downside risk.

Fitch’s move comes two months after Democratic President Joe 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 added.

In 2011, S&P Global Ratings had downgraded the US credit rating to AA+ , one notch below the top tier, after the debt ceiling impasse.

Disagreeing with Fitch’s downgrade, US Treasury Secretary Janet Yellen called the credit rating “arbitrary and based on outdated data.”

The White House also said it “strongly disagrees with this decision”.

“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,” said White House press secretary Karine Jean-Pierre.

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)

Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:2 Aug 2023, 08:28 AM IST
Business NewsMarketsStock MarketsFitch cuts US credit rating to AA+ from AAA after debt limit standoffs; White House “strongly disagrees”

Most Active Stocks

Tata Motors share price

784.95
03:56 PM | 12 NOV 2024
-19.8 (-2.46%)

Tata Steel share price

144.15
03:56 PM | 12 NOV 2024
-0.8 (-0.55%)

Tata Power share price

414.25
03:56 PM | 12 NOV 2024
-17.25 (-4%)

Oil & Natural Gas Corporation share price

256.20
03:55 PM | 12 NOV 2024
-0.7 (-0.27%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Fortis Healthcare share price

638.50
03:29 PM | 12 NOV 2024
14.6 (2.34%)

Coforge share price

8,099.00
03:45 PM | 12 NOV 2024
35.6 (0.44%)

HCL Technologies share price

1,862.90
03:29 PM | 12 NOV 2024
-4.1 (-0.22%)

Federal Bank share price

207.15
03:53 PM | 12 NOV 2024
-0.6 (-0.29%)
More from 52 Week High

ITI share price

295.15
03:51 PM | 12 NOV 2024
-32.25 (-9.85%)

Jyothy Labs share price

441.65
03:55 PM | 12 NOV 2024
-35.7 (-7.48%)

Whirlpool Of India share price

1,789.90
03:29 PM | 12 NOV 2024
-141.5 (-7.33%)

Britannia Industries share price

5,028.25
03:56 PM | 12 NOV 2024
-397.05 (-7.32%)
More from Top Losers

Uno Minda share price

1,002.75
03:48 PM | 12 NOV 2024
80.45 (8.72%)

Jubilant Foodworks share price

636.30
03:29 PM | 12 NOV 2024
34.45 (5.72%)

The Ramco Cements share price

910.25
03:40 PM | 12 NOV 2024
40.3 (4.63%)

Macrotech Developers share price

1,241.65
03:44 PM | 12 NOV 2024
52.9 (4.45%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    77,305.00-1,470.00
    Chennai
    77,311.00-1,470.00
    Delhi
    77,463.00-1,470.00
    Kolkata
    77,315.00-1,470.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.92/L0.00
    Chennai
    100.80/L0.00
    Kolkata
    104.95/L0.00
    New Delhi
    94.77/L0.00

    Popular in Markets

      HomeMarketsPremiumInstant LoanMint Shorts