Downgraded: Fitch Lowers US Debt Rating Amidst Systemic Concerns and Global Impact

Fitch Ratings has lowered the US debt rating from the top-notch AAA level to AA+, according to the article published by PaySpace Magazine. The agency attributed its decision to downgrade to a steady decline in management standards, indicating that this deterioration has become a systemic and long-term trend. The downgrade is not solely a result of one factor but is influenced by several elements. One of the factors was the delay in raising the debt ceiling, which American lawmakers struggled with until the last permissible time. Additionally, the events of January 6, 2021, involving the Capitol's storming by supporters of the 45th US President Donald Trump, also played a role in the downgrade.

According to media reports, Fitch representatives held meetings with officials from the current President Joe Biden's administration. They emphasized that the events of January 6 were not isolated but rather represented a larger issue within the modern state system. The problems and circumstances from that time continue to impact the political landscape, emphasizing the need for adjustments in the US management process.

While the full report on the downgrade did not explicitly mention the January 6 events as a factor, insiders assert that these issues are real and ongoing concerns. The downgrade signifies that the once perceived safe haven of the US debt is no longer as secure. It may lead to global consequences, affecting mortgage rates and international contracts.

The media also suggest that the downgrade could prompt investors to sell treasury bonds, leading to increased profitability and interest rates on various loans. Fitch's report also predicts a deterioration of the financial system over the next three years due to the high level of government debt burden and weakened governance.

Officials from the US presidential administration, including Treasury Secretary Janet Yellen and White House Press Secretary Karine Jean-Pierre, expressed strong disagreement with the downgrade. They deemed it arbitrary and based on outdated data. Similarly, Senate Majority Leader Chuck Schumer blamed the Republican Party's actions for the rating decline, linking it to their flirtation with default and reckless behavior.

The last time the US debt rating was downgraded was in 2011 by another rating agency, S&P. The 2011 decision caused significant market fluctuations. Before that, the US had an ideal credit rating since 1917. The new Fitch rating places the US on par with Austria and Finland but below Switzerland and Germany.

A representative from the US administration pointed out that Fitch was the only rating agency with a negative forecast and was unsure if it would influence other agencies' analytics. After the announcement of the Fitch rating, futures for major stock indices, including Dow Jones Industrial Average, S&P 500, and Nasdaq-100, declined slightly.

Former US Treasury Secretary Larry Summers found the downgrade strange and inept, arguing that the current economic system of the United States is displaying more strength than expected.