The world’s leading rating agency Fitch has downgraded America’s rating. It has been downgraded from AAA to AA+. After the year 2011, any agency has cut the rating of America.
Along with Fitch, S&P Global Ratings, and Moody’s Investors Service are considered the world’s top three rating agencies.
In 2011, S&P downgraded the US rating from AAA to AA+. In this way, two of the world’s top three rating agencies have downgraded America’s rating.
Now only America has AAA rating in Moody’s list. Investors around the world consider credit ratings as a benchmark for investment. This shows how much risk is involved in investing money in instruments of a company or government.
There are only a few countries in the world which have been given top ratings by all the three rating agencies. These include Germany, Denmark, Netherlands, Sweden, Norway, Switzerland, Luxembourg, Singapore and Australia. Canada has been given AAA rating by two agencies. Fitch has given AA+ rating to Canada.
AAA is considered prime rating and AA+ is considered high rating. Investing in US government instruments has been considered the safest. America is the largest economy in the world and has never defaulted.
But in June this year, there was a huge political deadlock over raising the debt ceiling. In June, the government managed to raise the debt ceiling to $31.4 trillion, but this dented its credibility.
