'Arbitrary': Janet Yellen slams Fitch US credit downgrade

On Tuesday, August 1, Fitch Ratings announced that it had "downgraded" its credit rating for the United States from "AAA" to "AA+."

Fitch explained, "The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance."

Fitch cited the United States' "repeated debt limit standoffs and last-minute resolutions" as a factor, adding, "In Fitch's view, 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."

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The New York Times, however, reports that "the U.S. economy is performing strongly" and notes that "Fitch's own model shows the U.S. economy deteriorating during the Trump Administration and recovering under President Biden."

CBS News pointed out that "political unrest" in the United States was another factor in Fitch's decision, adding that a lower credit rating makes it "more expensive to borrow money."

U.S. Treasury Janet Yellen, in an official statement, complained, "The change by Fitch Ratings announced today is arbitrary and based on outdated data."

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Watch CBS News' report below or at this link.