Despite Treasury Secretary Janet Yellen’s protests, Fitch cut the US government’s long-term credit rating from AAA to AA+ this week. In actuality, our long-term credit should be worth little more than a D.
Powell: Raising interest rates will not be enough
In an article from CNN, there’s a reason why Jerome Powell not only raised interest rates, but also signaled that they’ll stay high for a while and may even rise again later this year. Despite the White House’s manufactured data suggesting that inflation has been defeated, Powell is fully aware of what is to come. His predecessor, now Secretary of the Treasury Janet Yellen, planned to issue biblical levels of debt this year, causing everlasting inflation.
Unfortunately for Powell, raising interest rates will not be enough to stem the inflationary wave unleashed by the debt tsunami. High interest rates will simply depress the economy and government revenue, making debt repayment even more costly. We’re in unknown land.
According to CNN, Fitch Ratings downgraded the United States’ debt rating from AAA to AA+ on Tuesday, citing “a steady deterioration in governance standards.”
US government’s long-term credit
The downgrade comes after lawmakers failed to reach an agreement on the debt ceiling until the last minute earlier this year, placing the country at risk of its first default. The January 6 insurgency, on the other hand, had a crucial impact.
According to a person familiar with the subject, Fitch Ratings representatives regularly mentioned the January 6th insurgency as a serious challenge for US governance during a discussion with Biden administration officials. The credit agency made no mention of the insurgency in its detailed report on the downgrade, reports Blaze Media.
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