June 3, 2023
We may have avoided the debt default crisis but the United States’ excellent credit rating could still take a hit.
That’s because one of the big US credit rating agencies said– it’s keeping the United States on its “rating watch negative” list for a possible credit downgrade.
I told you about the original warning from fitch in this video in may but right after the debt ceiling bill passed – Fitch put out a statement basically saying to congress yeah congratulations on doing the bare minimum but we told you waiting till the last minute could cost you. And as the kids say — Congress fucked around and will soon find out.
what fitch actually said was “Fitch believes that repeated political standoffs around the debt-limit and last-minute suspensions before the x-date lowers confidence in governance on fiscal and debt matters.” They point to “steady deterioration” in governance over the last 15 years. And say the political polarization in the 2020 election, the brinksmanship over the debt limit and the failure to tackle the country’s financial issues has ballooned the debt and it’s a problem for the United States credit.
As I reported a few weeks ago, a credit downgrade could spike up interest payments on that massive $31.5 trillion debt which would cost all of us taxpayers billions of dollars. Fitch ends the notice by saying they will make a decision on whether to downgrade the US from its AAA credit rating in the third quarter of this year.
Read the follow up warning from Fitch here.
