August 2, 2023

Global stock markets tumbled on Wednesday after ratings agency Fitch downgraded the United States’ long-term credit rating — but top economists say there is nothing to worry about.

Fitch announced late on Tuesday that it had cut the U.S. long-term foreign currency issuer default rating to AA+ from AAA, citing “expected fiscal deterioration over the next three years,” an erosion of governance in light of “repeated debt-limit political standoffs” and a generally growing debt burden.

U.S. stock futures were sharply lower after the downgrade, pointing to a fall of almost 300 points for the Dow Jones Industrial Average at the Wednesday open on Wall Street.

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