2023-08-02 18:12:57
The rating agency notably mentioned “the fact that the governments, on both sides, Republicans and Democrats, have not been able to find lasting solutions to resolve the growing budgetary problems.”
The Biden administration cried injustice on Wednesday following Fitch’s decision to deprive the United States of its precious AAA, the rating agency explaining for its part that it was a consequence of the deterioration of governance, sending Republicans and Democrats back to back. “Among the important elements for us is the fact that the governments, on both sides, Republicans and Democrats, have not been able to find lasting solutions to solve the growing budgetary problems”, justified on CNBC, Richard Francis, head of the Americas at Fitch Ratings.
“We have observed a fairly constant deterioration in governance over the past decades,” he insisted, particularly highlighted by “the constantly tightrope resolution of the issue of the debt ceiling”.
A decision which however goes badly on the side of the American government, the president of the Council of economic advisers, attached to the White House, Jared Bernstein, even qualifying it as “bizarre, arbitrary, absurd and confusing”. “The timing makes no sense. The president (Biden, editor’s note) passed important measures supported by both parties, in particular the major climate plan (IRA, editor’s note) which not only solved the debt ceiling but has made it possible to reduce the deficit by 1,000 billion dollars”, detailed Jared Bernstein on the CNBC channel.
Only Moody’s still assigns a AAA
The rating agency announced on Tuesday that it had downgraded the rating of long-term American debt from AAA to one notch below, AA+, and associated it with a “stable” outlook, which means that Fitch does not expect further deterioration in the short term. Fitch is the second agency to downgrade the US rating, the previous action in this area by S&P, however dating back to 2011. S&P has never since upgraded the US rating, which is also at AA+. Only Moody’s still assigns, at this stage, the best credit rating to the debt of the world’s largest economy.
As of Tuesday evening, the White House had criticized the agency’s decision, saying that “it goes once morest the reality of degrading the United States at a time when President Biden has made it possible to achieve the strongest recovery ever. of all the major economies of the world”, according to its spokesperson, Karine Jean-Pierre.
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