In the international rating agency, Federal August 1st rated the long -term foreign currency issuer in the United States from AAA to AA+.This is another major international rating agency that cancels the American AAA credit rating after the 2011 standard.This time, the U.S. debt credit rating is well -thought -out and reasonable.
Fitch reduction in US credit rating is mainly based on the following four points: First, high debt is high.Fitch predicts that in 2025, the total US federal debt accounted for 118.4%of the GDP (GDP), which was as high as 39.3%of the median AAA rating; the second was the political deadlock.Although the two parties in the United States are temporarily relieved of political quarrels that increase the upper limit of debt, potential US debt default risks and poor federal government's financial governance capabilities are leading to increasing concern for investors; and third, medium -term financial challenges.In the next 10 years, social burdens such as soaring in US interest expenditure and aging population aging will increase. Social Security Fund and Medical Insurance Trust Fund have exhausted risks to make the United States more complicated; fourth, economic performance.Against the background of monetary policy tightening and insufficient fiscal expenditure space, the US economy will be more difficult.Obviously, these four reasons can stand up.
Fitch points directly to the essence of the US economic problem, which not only triggers the turbulence of the US capital market, but also touches the official sensitive nerves of the United States.The White House press secretary said: "When President Biden realized the strongest recovery of the world's major economies, it was not realistic to reduce the US rating." US Treasury Secretary Yellen said: "The decision of strong disagreement with the best of the excellent,This is completely unfounded. "
However, the Wall Street Journal published an editorial on the 2nd that the rating was reduced to be a non -confident voter voted for American political leaders, reflecting the failure of US political leadership.Fitch pointed out in a statement that the US credit rating is mainly due to the high burden on government debt and continuously aggravating. The financial situation in the next three years is expected to continue to deteriorate.In the past 20 years, the United States has repeatedly appeared in the political deadlock in the upper limit of debt. It has often been resolved until the last moment, which has weakened people's confidence in US fiscal management capabilities.
As early as a report in May 2022, Fitch has reduced US credit expectations from "stability" to "poor", saying that the US debt limit crisis brings uncertainty.On June 3 this year, Biden signed a bill on the upper limit of the federal government debt and budget, ending the uncertainty that may fall into the government debt default.The bill is suspended from the effective time of the debt limit until the beginning of 2025, and restricts the expenditure of fiscal year and fiscal 2025.Although the US debt limit crisis may be forgotten for a while, from a long -term perspective, the US economy and even the global financial market will be affected in the future, and risks are still difficult to ignore.
Fitch lowers US credit rating, highlighting the lack of seriousness in US economic decisions.Since the standard of US credit rating in 2011, the US fiscal and political prospects have deteriorated significantly, and debt and US dollar credit risks have been accumulated.Fitch released a strong signal of rising debt risk to market investors.According to the US Congress Budget Office (CBO) forecast, in 2033, the total debt in the United States will soar to US $ 523,333 (about S $ 7880 billion).As the US debt financing model is becoming increasingly difficult to sustain, the US bond market will be severely impacted.
In the context of the high interest rate of federal funds, the return rate of medium and long -term Treasury bonds in the United States has been in the highest level since 2008, and investors' confidence in U.S. Treasury bonds has decreased significantly.In particular, in order to obtain political achievements, stimulate the economy, and compete with China, the government has launched a trillion -dollar government expenditure policy, and directly holds a large number of US long -term debt in the Federal Reserve to implement debt monetization.CBO predicts that in 2033, the Fed's direct holding of US debt is still as high as US $ 75 million.This American money and the world's bills weaken are the foundation of the US dollar credit.Japan, China, and Britain have increased their sales of US debt.
According to data from the US Treasury, the first nine months of this fiscal year (October 2022 to June 2023), the government fiscal deficit was about $ 1400 billion, which was nearly three times the same period last year.The current US public debt has exceeded 3206 million US dollars, which is equivalent to nearly $ 100,000 per American liabilities.The size of the US debt exceeded 3.2 trillion US dollars, nine years earlier than the prediction before the crown disease.Fitch pointed out that the current tightening of credit conditions, weak commercial investment, and slowing consumption will cause the US economy to fall into recession in the fourth quarter of 2023 and the first quarter of 2024.
Fitch reduction may exacerbate the uneasiness of US debt status, political bipolarization, and global status of US dollar, and damage the overall reputation and image of the United States.Faced with credit downgrade, the Republican and Democratic Party blame each other.The Republican Party stated that the responsibility for relegation was mainly to increase government expenditure and financial burden.The White House believes that the reckless blindness of former President Trump is the culprit.
In the context of continuous debt, US politicians and Federal Reserve officials have pursued short -term interests and leaving the negative impact on the successors.If such a political environment continues, the US Treasury bond thunder will be a matter sooner or later.Under the existing political system, the reform of the social welfare system and the reform of tax policy are difficult to implement, and the ratio of debt to GDP will inevitably continue to rise in the future.
At the same time, the United States abuses economic sanctions against other countries and promotes geopolitical division, which threatens the global monetary system led by the US dollar. Many countries will not only increase their holdings of US debt, but also find the opportunity to sell US debt.
In short, the upper limit of debt in the United States can be solved through the compromise of the two parties. Borrowing money always has to be repaid. The actual solution of the problem must find a reasonable method of balance of income and expenditure.The debt is constantly rising and there is no real response method. Credit reduction is natural; the possibility of further reduction in US debt credit cannot be ruled out.
The author is a researcher at the Academy of Social Sciences, China
