Fitch on Tuesday downgraded the United States' credit rating by a step from AAA to AA+, citing factors like an "erosion of governance" that has manifested in debt limit standoffs, AFP reported.
The move is not unprecedented, with a debt ceiling impasse in 2011 leading S&P to lower Washington's AAA rating as well, drawing bipartisan outrage.
"The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance" relative to peers, said Fitch in a statement.
It added that there was a stable outlook assigned.
Treasury Secretary Janet Yellen said she "strongly" disagreed with Fitch's decision, calling it "arbitrary and based on outdated data."
She said that Fitch's quantitative ratings model declined between 2018 and 2020 but the agency was only announcing its change now despite progress seen in indicators.
Yellen stressed that "Treasury securities remain the world's preeminent safe and liquid asset, and that the American economy is fundamentally strong."
In May, Fitch placed the country's credit on "rating watch negative," reflecting increased political partisanship that hampered a resolution to raise or suspend the debt limit ahead of a looming deadline.
While lawmakers reached a bipartisan agreement to avert a catastrophic default, Fitch in June kept the US on negative watch.