Fitch placed USA on negative watch back in May, now has cut the US rating from triple A

<p>From back in May, news that Fitch was casting a very very wary eye at the USA on the debt ceiling debacle and US governance difficulties:</p><ul><li><a href="https://www.forexlive.com/news/fitch-says-will-resolve-us-negative-ratings-watch-in-q3-20230602/" target="_blank" rel="follow">Fitch is out with something of an ominous warning on the US credit rating</a></li><li><a href="https://www.forexlive.com/news/fitch-ratings-place-usa-on-rating-watch-negative-20230524/" target="_blank" rel="follow">United States' 'AAA' rating watch negative reflects increased political partisanship that is hindering resolution to raise or suspend debt limit</a></li></ul><p>And now, action from the agency:</p><ul><li><a href="https://www.forexlive.com/news/fitch-downgrades-usa-long-term-credit-rating-to-aa-from-aaa-20230801/" target="_blank" rel="follow" data-article-link="true">Fitch downgrades USA long-term credit rating to AA+ from AAA</a></li></ul><p>Fitch is very much the #3 rating agency behind S&amp;P and Moody's, but still, this is not a positive development for holders of US sovereign bonds. Some funds, for example, are mandated to only hold AAA-rated sovereign bonds.</p><p>Lets see if the bigger two agencies follow suit. </p><p>-</p><p>Of more concern, I reckon, is the timing of Fitch dropping this bombshell. US regular market hours are closed. If the plan was to trigger market chaos this timing would be pretty close to the #1 option. </p><p>So far the markets that are open (hello FX traders) are relatively subdued. </p>

This article was written by Eamonn Sheridan at www.forexlive.com.