Fitch Ratings downgraded the United States’ long-term credit rating from AAA to AA+ on August 1. Citing recent debt-ceiling standoffs and the country’s ballooning fiscal deficits, Fitch’s downgrade is reminiscent of a similar move by S&P Global Ratings in 2011. Officials in Washington were dismissive of Fitch’s actions, referencing the strength of the American economy and U.S. Treasury Debt’s continued role as the world’s safest and most liquid asset for global investors. However, it’s worth noting that Fitch has maintained the highest F-1+ rating for short-term U.S. debt.
North Carolina CLASS will continue to closely monitor developments from the rating agencies and Washington, D.C., maintaining focus on the safety and liquidity of your funds. Much like S&P Global Ratings’ downgrade of the U.S. to AA+ in 2011, this may prove to have little to no impact on North Carolina CLASS. Until then, North Carolina CLASS will remain vigilant as the market digests this new development. As always, we will continue to provide further updates as information, policies, and actions arise.