US Treasury chief says Fitch downgrade 'puzzling'

ISTANBUL

US Treasury Secretary Janet Yellen said Wednesday that Fitch Ratings’ downgrade of the US's credit rating was "puzzling" and "unwarranted."

"Fitch’s decision is puzzling in light of the economic strength we see in the United States," she said in remarks on the Inflation Reduction Act and progress in modernizing the Internal Revenue Service (IRS).

"I strongly disagree with Fitch’s decision, and I believe it is entirely unwarranted," she added.

Yellen called the rating agency's decision a "flawed assessment" and argued that it is based on outdated data and fails to reflect improvements across a range of indicators, including those related to governance during the past two and a half years.

Fitch on Tuesday downgraded the US's long-term foreign-currency credit rating to "AA+" from "AAA" with a stable outlook, stating that the change reflects expected fiscal deterioration over the next three years and a high and growing general government debt burden as well as debt limit standoffs and last-minute resolutions.

Yellen, on the other hand, responded that both Democrats and Republicans came together to pass legislation to resolve the debt limit despite the gridlock.

"At the end of the day, Fitch’s decision does not change what all of us already know: that Treasury securities remain the world’s preeminent safe and liquid asset, and that the American economy is fundamentally strong," she said in a statement released by the Treasury Department.