PHILADELPHIA (KYW Newsradio) — Earlier this month, Fitch Ratings, one of three private credit rating firms, downgraded the U.S. credit rating from AAA to AA+ — the first time the country’s rating dropped since 2011.
The U.S. now joins Austria, Finland and New Zealand as AA+ countries.
The rating is still good — think of going from an A+ to an A in a course, says Dr. Marco Airaudo, a professor of economics at Drexel University’s Lebow College of Business.
“It’s not that you’re doing bad, you’re doing really well,” he added. “But you’re not considered in more of in the top elite of safest countries, in terms of borrowers.”
While the drop isn’t huge, it will still affect Americans.
“If, say, the U.S. Treasury goes from paying 3% to 5%, there’s gonna be quite a good likelihood that also mortgages and credit card agencies are going to raise the rates as well,” Airaudo explained.
He talks about why the U.S. credit rating is down and what this means for us on the newest episode of KYW Newsradio In Depth. Listen to the full conversation in the player below, on the Audacy app or wherever you get your podcasts.