Fitch had previously announced that it would consider such a move. The USA does not have to expect any further adversity for the time being, Fitch has set the outlook to “stable”.
The agency justified the downgrade with the expected fiscal deterioration in the next three years. In addition, the debt is high and rising. Fitch also criticized the disputes over the past twenty years between the administration and Congress over the country’s debt limit.
Fitch is taking a step that rating rival S&P had already taken in 2011. The third major agency, Moody’s, on the other hand, has not yet taken away the top rating from the USA. Nevertheless, the air for the US state on the debt market is now getting thinner. Because conservative investors like to avoid paper that doesn’t have the best rating. All the more so, the more of the big agencies do not award it.
US Treasury Secretary Janet Yellen described the downgrade in a first reaction as “arbitrary” and “outdated”.
The euro benefited slightly on Wednesday from the US credit rating downgrade by the rating agency Fitch. The European common currency was trading at $1.0995 in early trade, up slightly from late last night. The European Central Bank (ECB) had set the reference rate at 1.0970 (Monday: 1.1023) dollars on Tuesday. In New York, the euro was trading at $1.0971 around 9 p.m. Tuesday.
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