U.S. stocks are already down about 1% today, so it’s hard to imagine what might have happened if Fitch had decided to follow Standard & Poor’s lead and cut the country’s prized AAA credit rating. Instead, the firm affirmed the U.S. credit rating and gave it a stable outlook. What follows is the full press release that accompanied Fitch’s decision:
Reporting for this post was done by the U.S. markets team in New York.
A number of Wall Street analysts have reacted to the historic downgrade of the U.S. AAA rating on Friday evening with a shrug. Some argue the ratings firm’s warnings about the U.S. debt deal offered an early signal, while others dismissed the action, questioning the company’s record of giving AAA ratings to housing assets that turned out to be toxic.
Standard & Poor’s on Friday downgraded the United States’ prized credit rating, a move that is likely to compound recent instability in financial markets. Here is S&P’s statement explaining the decision:
A potential downgrade of U.S. Treasury debt by a credit ratings agency, once seen as impossible for the world’s largest economy, could resound in financial markets more with a whimper than a bang. That’s because, as was evident in a Reuters poll, investors have largely come to expect it.