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Fitch Ratings has cut the US debt rating from triple A to double A plus in an unexpected blow to the world’s biggest economy.
The rating agency said its downgrade “reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance” relative to similarly rated peers over the past two decades, with the latter factor having “manifested in repeated debt limit stand-offs and last-minute resolutions.”
The US narrowly avoided a default just weeks ago, with the federal borrowing limit lifted at the eleventh hour after months of tension over spending cuts.
Fitch is one of three major rating agencies whose views are closely watched by market participants and economists around the world. Moody’s still maintains a triple A rating on the US, while S&P slashed its own rating to double A plus in 2011.
This is a developing story. More to follow