Fitch Ratings downgraded the U.S. credit rating Tuesday following a series of partisan debt standoffs on Capitol Hill.
Fitch announced Tuesday evening that the U.S. rating of "AAA," the highest possible rating, would be downgraded to "AA+" following this past year's debt limit showdown, even though a hike was authorized by Congress and President Joe Biden before the July deadline.
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A similar spending showdown is expected to take place in September.
"There has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025," Fitch wrote in a statement.
The White House did not respond to inquiries about the downgrade, yet Treasury Secretary Janet Yellen said she "strongly" disagrees with the decision.
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“I strongly disagree with Fitch Ratings’ decision. The change by Fitch Ratings announced today is arbitrary and based on outdated data. Fitch’s quantitative ratings model declined markedly between 2018 and 2020 — and yet Fitch is announcing its change now, despite the progress that we see in many of the indicators that Fitch relies on for its decision," she wrote in a statement. "Many of these measures, including those related to governance, have shown improvement over the course of this Administration, with the passage of bipartisan legislation to address the debt limit, invest in infrastructure, and make other investments in America’s competitiveness."
"President Biden and I are committed to fiscal sustainability. The most recent debt limit legislation included over $1 trillion in deficit reduction and improved our fiscal trajectory," she closed. "Looking forward, President Biden has put forward a budget that would reduce the deficit by $2.6 trillion over the next decade through a balanced approach that would support investments for the long-term."
This is a developing story and will be updated with new information when available.