What does the first downgrading of US credit ratings in 30 years mean?

The country’s IDR (Issuer Default Rating) for the US has been downgraded from AAA to AA+, according to Fitch. This was the first change in the rating since 1994. The agency explains this decision by “a steady deterioration in governance standards” of the American financial system, which is expressed in a steady increase in public debt and the federal budget deficit. Also, tangible risks are created by the likelihood of a recession at the end of this year.

“Repeated political standoffs over the debt ceiling and last-minute decisions have undermined the credibility of the financial authorities. In addition, the state does not have a systematic approach to medium-term financial management, unlike most government structures in other countries. It also seems to be very difficult for him to budget,” Fitch said in a statement.