Credit Downgrade

Credit rating agency Fitch has lowered the United States' perfect AAA rating by one level to an AA+, citing an expected fiscal deterioration over the next three years, rising government debt, and concerns about what it calls an erosion of governance. The decision comes two months after Fitch placed the US on a negative watch as a result of delays in a debt-ceiling deal.

Fitch is the second major agency to downgrade the US; the S&P Global in 2011 was the first to strip the nation of its AAA rating. The ratings are an independent assessment of a government's creditworthiness and ability to pay its financial obligations. Read an overview of credit ratings here.

The US government's repeated standoffs and last-minute resolutions on debt and fiscal issues are one of the reasons for Fitch's decision. The agency also noted the nation's debt, which has swelled to a record $32.6T due to a number of factors, including tax cuts and spending initiatives. Fitch predicts the US deficit will rise to 6.3% of gross domestic product in 2023 from 3.7% in 2022. Read its report here.