Reid’s Downgrade Remark Foreshadows Fitch Warning

Swampland

Updated, 5:20 p.m.

Senate Majority Leader Harry Reid said on the floor a bit after 11:30 a.m. Tuesday that rating agencies are talking about downgrading U.S. debt “as soon as tonight.”

The remark likely did not arise from inside knowledge about the plans of ratings agencies, a Reid adviser says. “To my knowledge, he has not been briefed,” said Adam Jentleson, Reid’s spokesman.

But after markets closed Tuesday evening, Fitch Ratings placed the U.S. credit rating under review for a downgrade, citing risks stemming from the looming debt crisis.  “Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default,” the agency wrote.

The move is not a downgrade, or an indictment of broader U.S. economic conditions. Rather, it is a warning issued on the basis of Congressional negotiators’ inability to break the partisan impasse…

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About squishymaru

Master's student in chemical engineering with a B.S. in chemical engineering as well. Loves chemistry, math, increasing diversity in STEM, politics, and public health advocacy. Loves reading, writing, and being active -- mentally and physically.

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