Washington: On Tuesday, the top international rating agency Fitch Ratings, released a report on the sliding status of the US economy. This Fitch report has strongly impacted the global stock market, including the United States. Asian and European stock markets have suffered huge losses along with major US indices. After the report of Fitch, the rates of housing loans have also increased in the United States, and there are indications of its impact on the US economy.
In the report released on Tuesday, ‘Fitch Ratings’ has reduced the status of the US economy from ‘AAA’ to ‘AA+’. In its statement, Fitch has disclosed the downgrading of the US economy due to the increasing debt burden on the economy, signs of deteriorating economic conditions and declining government capacity. In his submission, Fitch also mentioned the continuous struggle on the US debt ceiling and the decisions made at the last moment. Fitch has realised that there are big challenges in front of the country due to the increasing deficit of the US economy and the increase in interest rates. It is warned that in the last phase of 2023, the US economy will go into recession.
The United States has reacted strongly due to Fitch downgrading the economy. US Treasury Secretary Janet Yellen has criticised this, saying that this decision to set the rating is based on outdated information. Yellen also accused Fitch’s report of being one-sided and unacceptable. Former US Treasury Secretary Larry Summers has also expressed displeasure over Fitch’s decision and stated that it will not have much impact. Jamie Dimon, CEO of top US bank ‘JP Morgan’, has called this fall of ratings ridiculous.
Top businessmen have strongly criticised Fitch’s decision along with the Treasury Secretary, yet it has caused huge damage to the stock market. The prime US share indices, ‘Dow Jones’, ‘S&P 500’ and ‘Nasdaq’, declined heavily. The Dow Jones lost 348 points, and the ‘S&P 500’ fell by almost one and a half per cent. The Nasdaq index slipped a total of 2 per cent, the biggest decline in the index in the last six months. Shares of technology sector companies have suffered the most in this decline.
Apart from the United States, the stock markets of Japan, Hong Kong, South Korea, Germany, France, the United Kingdom and the European Union have also suffered losses in this decline. Japan’s ‘Nikkei 224’ index has crashed and reached the lowest level of the last seven months.
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