US ECONOMIC WOES: The United States faced a credit rating downgrade by Fitch Ratings, slipping from AAA to AA+. The downgrade was attributed to mounting fiscal deficits, unresolved medium-term challenges related to rising entitlement costs, and an erosion of governance. Despite Treasury Secretary Janet Yellen's response, the decision has raised concerns. Fitch forecasts the debt burden to reach 118 per cent of GDP by 2025, significantly higher than the AAA median. While yields on two-year Treasuries fell, the market's reaction is uncertain, as this downgrade could prompt risk-off moves and safe-haven buying of US Treasuries and the dollar. (Comment by: Nivetha Dayanand, Web Editor)
Reuters