August 2, 2023
United States:
Fitch’s US Credit Downgrade Sparks Criticism Along With Unease
Fitch Ratings’ downgrade of US government debt sparked criticism from Washington and Wall Street even amid unease that swollen fiscal deficits risk eventual turbulence in markets, the economy and next year’s presidential election.
Fitch cut the US’s sovereign credit grade one level from AAA to AA+. The move comes just two months after it warned the rating was under threat as lawmakers flirted with default by battling over raising the nation’s debt limit.
The credit grader justified the shift by arguing the country’s finances will likely deteriorate over the next three years given tax cuts, new spending initiatives, economic shocks and repeated political gridlock.
Europe:
More Russian Oil Trades Above G-7 Price Cap Despite Sanctions
Several of Russia’s refined oil products are trading above the price cap imposed by Group of Seven nations, in another sign that the value of its barrels is rising in defiance of sanctions.
Since February, there have been two caps on the sale of Russian refined fuels, one for higher value products at $100 a barrel and another for lower ones at $45.
Asia:
China Puts Pressure on Local Governments in Pro-Growth Push
China is stepping up its policy support for the economy, pressuring local governments to speed up the sale of bonds to fund infrastructure spending.
Regulators have told local authorities to use up this year’s quota of special purpose bonds by the end of next month, according to people familiar with the matter, and for the proceeds to be put to use by the end of October.
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