Fitch downgrades US credit rating

Washington, August 2

Fitch Ratings has downgraded the US government’s credit rating, citing rising debt at the federal, state, and local levels and a “steady deterioration in standards of governance” over the past two decades.

The rating was cut on Tuesday by one notch to AA from AAA, the highest possible rating. The new rating is still well into investment grade.

The decision illustrates one way that growing political polarisation and repeated Washington standoffs over spending and taxes could end up costing US taxpayers.

A lower credit rating, over time, could raise borrowing costs for the US government.

It’s only the second time in the nation’s history that its credit rating has been cut. In 2011, the ratings agency Standard and Poor’s stripped the US of its prize AAA rating after a prolonged fight over the government’s borrowing limit. — AP

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