Rating agency Fitch on Wednesday downgraded the US government’s top credit rating. The move drew an angry response from the White House and surprised investors, coming despite the resolution of the debt ceiling crisis two months ago. 

US Treasury Secretary Janet Yellen disagreed with Fitch's downgrade in a statement that called it “arbitrary and based on outdated data”.

Traders’ immediate response was to embark on a safe-haven push out of stocks and into government bonds and the dollar. 

Fitch downgraded the United States to AA+ from AAA, citing fiscal deterioration over the next three years and repeated down-the-wire debt ceiling negotiations that threaten the government’s ability to pay its bills.

Fitch had first flagged the possibility of a downgrade in May, then maintained that position in June after the debt ceiling crisis was resolved, saying it intended to finalise the review in the third quarter of this year. 

With the downgrade, it becomes the second major rating agency after Standard & Poor’s to strip the United States of its triple-A rating. 

Fitch’s move came two months after Democratic President Joe Biden and the Republican-controlled House of Representatives had reached a debt ceiling agreement that had lifted the government’s $31.4-trillion borrowing limit, ending months of political brinkmanship.