Fitch cut the federal government’s top rating, citing rising deficits and a steady deterioration in governance over the last two decades. The action drew a sharp rebuke from the Biden administration.
Fitch Ratings cut the United States’ credit rating by one notch, from the top-rated AAA to AA+, saying rising deficits and political brinkmanship are imperiling the government’s ability to pay its debts.
The downgrade comes two months after the Biden administration and House Republicans agreed to suspend the government’s debt ceiling in a last minute deal, narrowly avoiding a potentially disastrous federal default.
It marks another rebuke for the U.S., which lost its AAA rating from Standard & Poor’s in 2011 in the midst of another debt ceiling standoff. Today, only one of the three major credit ratings agencies — Moody’s Investors Service — gives the United States a top-notch AAA rating.
Fitch acknowledged the strength of the U.S. economy and the advantages conveyed by the dollar’s role as the world’s most important currency.
But the credit rating agency warned of mounting red ink and an unwillingness in both political parties to grapple with long-term fiscal challenges, while expressing little confidence in the government’s ability to manage the country’s finances.
