International ratings agency Fitch said it had downgraded the United States' Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'AA+' from 'AAA' with a stable outlook.
“The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades,” Fitch said in a statement.
Among other factors that led to the decision, Fitch named the threat of recession and the growth of Fed interest rates.
Fitch has never downgraded U.S. below AAA. In 2011, a similar decision was made by S&P, which also downgraded the United States to AA+. Fitch warned about the possibility of a downgrade in 2013, 2019 and 2023.
Secretary of the Treasury Janet Yellen said she strongly disagreed with the move.
"I strongly disagree with Fitch Ratings’ decision. The change by Fitch Ratings announced today is arbitrary and based on outdated data," she said.
Yellen added that "the American economy remains the world’s largest and most dynamic economy, with the deepest and most liquid financial markets in the world."
