Treasury Secretary Janet Yellen testified before the House Financial Services Committee on the state of the international financial system, in the Rayburn House Office Building on Capitol Hill in Washington, DC on June 13, 2023.
Mandel Ngan | Afp | Getty Images
WASHINGTON — Treasury Secretary Janet Yellen expressed her disapproval of Fitch’s decision to downgrade the United States’ longstanding credit rating, which resulted in a decline in stock prices.
Yellen, in a meeting with IRS Commissioner Danny Werfel, described the move as “surprising,” given the nation’s strong economic recovery from the Covid pandemic.
Fitch downgraded the nation’s rating from AAA to AA+ due to “expected fiscal deterioration over the next three years” and “repeated debt-limit political standoffs.”
“I strongly disagree with Fitch’s decision, and I believe it is entirely unwarranted,” Yellen stated. “Their flawed assessment is based on outdated data and fails to acknowledge the improvements we have seen across various indicators, including governance, over the past two and a half years.”
Yellen highlighted the recent positive economic figures for the United States, including the creation of over 13 million jobs since January 2021, an unemployment rate of 3.6% (near historically low levels), and a decrease in overall annual inflation over the past year.
CNBC has reached out to Fitch for a comment regarding Yellen’s remarks.
“Ultimately, Fitch’s decision does not alter what we already know: that Treasury securities remain the world’s leading safe and liquid asset, and that the American economy is fundamentally strong,” added Yellen.
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