Another Credit Agency Could Downgrade US Rating
Credit rating agency Fitch has issued a negative outlook warning for the US, threatening to downgrade the nation’s AAA rating.
According to Fitch, “prolonged negotiations over raising the debt ceiling (following the episode in August 2011) risks undermining confidence in the role of the U.S. dollar as the preeminent global reserve currency, by casting doubt over the full faith and credit of the U.S.”
Matthew Yglesias: “You should not put great stock in sovereign debt ratings, especially for large well-known and well-covered countries like the United States of America. There’s no actual informational content in this action beyond the obvious—the apparent institutionalization of Republicans using the debt ceiling as leverage for policy concessions has made American debt riskier than it should be.”