On Tuesday, both the US Treasury Department and the administration of President Joe Biden objected to the downgrade of the credit rating of the United States by credit  rating company Fitch from AAA to AA+.

In a press conference with reporters, White House press secretary Karine Jean-Pierre said, “We strongly disagree with this decision,” noting that it “defies reality” now that the United States has entered a “robust recovery.”

Janet Yellen, the United States Treasury Secretary, said that she also “strongly disagreed” with the decision by Fitch, noting that it was “arbitrary and based on outdated data” and that US Treasury securities continue to be the world’s “preeminent safe and liquid asset.”

Fitch is among the big three credit rating agencies in the United States, along with Moody’s and Standard & Poors. It announced on Tuesday that it was downgrading Washington’s “long-term foreign-currency issuer default rating,” pointing to issues in the United States with governance, rising deficits, and a potential recession approaching, among other issues.

Fitch noted that its decision “reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance” compared to other nations with similar ratings over the past two decades, “that has manifested in repeated debt limit standoffs and last-minute resolutions,”

The ratings agency predicted that the deficit in the United States would continue to grow, given that the debt-to-GDP ratio in the United States was presently at 100.1%, which is two and a half times above the median for AAA-rated nations, which is 39.3%.

The ratings agency also cited the recent interest rate hikes by the Federal Reserve, as well as “weakening business investment, and a slowdown in consumption” as it predicted that in the fourth quarter of 2023 there would be a “mild recession” which would continue into the first quarter of 2024.