The old joke is that actuaries make accountants look interesting. Now that Fitch wants to play politics, financial rating agencies are making even political pollsters look credible. Right now, there is no fiscal crisis to catalyze a downgrade amidst a resurgent Bidenomics-fueled economy, with inflation coming down, record-low unemployment, strong GDP growth, exuberant stock markets, and a renaissance in domestic manufacturing. There is now speculation that Fitch’s downgrade may have been driven more by self-aggrandizement with the Fitch sovereign debt team getting their 15 minutes of fame or perhaps even by an implicit pro-Trump bias.
By downgrading the creditworthiness of U.S. sovereign debt almost immediately after former President Trump’s indictment, and by sadly doubling down on a bad hand by downgrading U.S. government-adjacent institutions such as Fannie Mae and Freddie Mac, Fitch is quickly becoming a widely lampooned joke across the business community. CNBC host Jim Cramer laughed, “They know nothing,” while venerated JPMorgan CEO Jamie Dimon decried Fitch’s move, arguing that “to have other countries be triple-A and not America is ridiculous. It’s still the most prosperous nation on the planet, it’s the most secure nation on the planet”.
