Fitch Ratings has cut the US debt rating from triple A to double A plus, citing worsening fiscal conditions and governance, two months after political brinkmanship brought the world’s largest economy to the edge of a sovereign default.
The rating agency on Tuesday said its downgrade reflected “expected fiscal deterioration over the next three years” and “a high and growing general government debt burden”. Fitch also cited an “erosion of governance” over the past two decades “that has manifested in repeated debt limit stand-offs and last-minute resolutions”.
Washington narrowly avoided a default projected for June after legislators and the White House reached a deal to raise the federal borrowing limit at the eleventh hour. Fitch in late May had warned of a possible downgrade, citing “increased political partisanship that is hindering reaching a resolution”.