Fitch Ratings Downgrades US Credit Rating and Weakening Greenback
Fitch Ratings has downgraded the United States’ long-term foreign-currency issuer default rating due to concerns over national debts. The American currency rating has been cut from AAA to AA+, citing expected fiscal deterioration over the next three years. Fitch stated that there has been an erosion of governance and a growing general debt burden, with the US national debt currently standing at $32.6 trillion. Confidence has been eroded due to repeated debt-limit political standoffs and last-minute resolutions. Fitch also expects the general government deficit to rise and projects a US recession by the end of this year.
Main Breakdowns:
- Fitch downgrades US credit rating from AAA to AA+
- Growing general debt burden and erosion of governance
- Repeated debt-limit political standoffs and last-minute resolutions
- Expected rise in general government deficit and projected US recession
- Weakening of the US Dollar against global currencies and commodities
Hot Take:
The downgrade of the US credit rating by Fitch Ratings reflects concerns over the country’s fiscal deterioration and growing debt burden. The erosion of governance and repeated debt-limit political standoffs have further eroded confidence. With the US Dollar weakening against global currencies, and the projection of a US recession by the end of the year, it is clear that the economic challenges facing the United States are significant. This may have implications for various markets, including cryptocurrencies, which have seen a modest increase but have remained largely sideways for several months.