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Fitch: The downgrade of America's rating came due to polarization and deteriorating governance
Arab and international
Economy News - Baghdad
Richard Francis, senior director of sovereign ratings at Fitch Ratings, told Reuters today, Wednesday, that Fitch made its decision to lower the credit rating of the United States due to financial concerns, deteriorating governance, and a state of polarization that was evident during the events of January 6, which are the events of storming the US Capitol building.
In a move that surprised investors, Fitch downgraded the United States on Tuesday from AAA to AA+, attributing this to the expected financial deterioration over the next three years and repeated government debt ceiling negotiations that threaten the administration's ability to pay its obligations.
Francis said that the agency based its decision on reasons, including the noticeable deterioration in US governance, which he stressed reduces confidence in the government's ability to deal with financial and debt issues.
This deterioration, in addition to the increase in political polarization in the country, was reflected in the violent events that took place on the sixth of January, which the agency highlighted during its discussions with the Treasury Department.
Fitch had meetings with the Treasury Department prior to the downgrade.
"We highlighted this because it was only a reflection of the deterioration of governance, and this is one of several reasons," Francis said.
"There is the debt ceiling, there are the events of January 6th.
And clearly, if you look at the polarization in the two parties...the Democrats have moved to the left and the Republicans have moved more to the right, basically weakening the center somewhat."
Fitch became the second major credit rating agency to downgrade the United States, after it was downgraded by Standard & Poor's.
US Treasury Secretary Janet Yellen criticized Fitch's decision, saying it was "arbitrary and based on outdated data."
Views 47
Added 08/02/2023 - 8:18 PM
https://economy-news.net/content.php?id=35467
Arab and international
Economy News - Baghdad
Richard Francis, senior director of sovereign ratings at Fitch Ratings, told Reuters today, Wednesday, that Fitch made its decision to lower the credit rating of the United States due to financial concerns, deteriorating governance, and a state of polarization that was evident during the events of January 6, which are the events of storming the US Capitol building.
In a move that surprised investors, Fitch downgraded the United States on Tuesday from AAA to AA+, attributing this to the expected financial deterioration over the next three years and repeated government debt ceiling negotiations that threaten the administration's ability to pay its obligations.
Francis said that the agency based its decision on reasons, including the noticeable deterioration in US governance, which he stressed reduces confidence in the government's ability to deal with financial and debt issues.
This deterioration, in addition to the increase in political polarization in the country, was reflected in the violent events that took place on the sixth of January, which the agency highlighted during its discussions with the Treasury Department.
Fitch had meetings with the Treasury Department prior to the downgrade.
"We highlighted this because it was only a reflection of the deterioration of governance, and this is one of several reasons," Francis said.
"There is the debt ceiling, there are the events of January 6th.
And clearly, if you look at the polarization in the two parties...the Democrats have moved to the left and the Republicans have moved more to the right, basically weakening the center somewhat."
Fitch became the second major credit rating agency to downgrade the United States, after it was downgraded by Standard & Poor's.
US Treasury Secretary Janet Yellen criticized Fitch's decision, saying it was "arbitrary and based on outdated data."
Views 47
Added 08/02/2023 - 8:18 PM
https://economy-news.net/content.php?id=35467
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