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The credit grader cut the U.S. one level from AAA to AA+, echoing a move made more than a decade ago by S&P Global Ratings. Tax cuts and new spending initiatives coupled with multiple economic shocks have swelled budget deficits, Fitch said, while medium-term challenges related to rising entitlement costs remain largely unaddressed.
quickly responded to the downgrade, calling it “arbitrary” and “outdated.” Treasuries edged higher in early Asia trading after the Fitch announcement amid modest demand for haven assets.Article content “Fitch’s decision does not change what Americans, investors, and people all around the world already know: that Treasury securities remain the world’s preeminent safe and liquid asset, and that the American economy is fundamentally strong,” Yellen said in the statement.Broad losses in Europe dragged the benchmark regional index down by the most in almost four weeks.
The downgrade serves up an extra dose of jeopardy for equity investors already concerned over the risks of recession and whether this year’s run-up in stock markets is sustainable.There was an error, please provide a valid email address.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc.