Fitch downgraded the U.S. credit rating due to fiscal concerns, a deterioration in U.S governance, as well as political polarization reflected partly by the Jan. 6 insurrection, Richard Francis, a senior director at Fitch Ratings, told Reuters on Wednesday.
In a move that took investors by surprise, Fitch downgraded the United States to AA+ from AAA on Tuesday, citing fiscal deterioration over the next three years and repeated down-to-the-wire debt ceiling negotiations that threaten the government’s ability to pay its bills.
The agency based its decision in part on a perceived deterioration in U.S. governance, which it said gave less confidence in the government’s ability to address fiscal and debt issues, Francis told Reuters, in the first comments made after the decision was published.
That deterioration, as well as increased polarization in the country’s political climate, was visible in the Jan. 6 insurrection, which the agency highlighted in meetings with the Treasury ahead of the downgrade.
“It was something that we highlighted because it just is a reflection of the deterioration in governance, it’s one of many,” he said. [Continue reading…]