Treasury Secretary Janet Yellen said she strongly disagreed with Fitch's decision to downgrade America's perfect credit rating, saying the agency made the announcement using outdated data.
The agency cut the US from its pristine AAA rating by one level to AA+ on Tuesday. Factors included the nation's growing debt burden, expected fiscal deterioration over the next three years and “the erosion of governance”.
But the timing of the decision was questioned, after recent data showed a resilient economy. Government reports have shown continued disinflation while gross domestic product growth blew past expectations in the second quarter of this year.
“Fitch's decision is puzzling in light of the economic strength we see in the US,” Ms Yellen told reporters at an event in McLean, Virginia.
“I strongly disagree with fitch's decision and believe it is entirely unwarranted.”
Ms Yellen also remained confident that the US continues to hold the “strongest financial system in the world” as it continues to recover from the doldrums of the Covid-19 pandemic.
She also criticised Fitch's “flawed” assessment for failing to reflect on the updated improvements on the US economy, including that which related to governance.
“Despite the gridlock, we've seen both parties come together to pass legislation, to resolve the debt limit as well as make historic investments in American infrastructure and competitiveness,” she said.
Recent economic data has led to economists showing a sunnier disposition towards the economy, evidenced by new forecasts that the US is on track to avoid a recession.
“It defies reality to downgrade the United States at a moment when President Biden has delivered the strongest recovery of any major economy in the world,” White House Press Secretary Karine Jean-Pierre said.
The White House said Fitch's decision was based on data from before President Joe Biden took office.
Investors use credit ratings as a benchmark for judging how risky it is to lend money to a government.
US Treasury yields changed little on Wednesday as traders weighed the decision by Fitch.
The US was put on negative credit watch by Fitch earlier this year over a debt ceiling standoff between the White House and Republican leadership.
A last-minute deal was struck to avert an economic catastrophe, but the credit agency remained wary of political divides.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch said.
Fitch also projects the US debt burden to balloon to 118.4 per cent of GDP by 2025. The average 'AAA' median is 39.3 per cent of GDP.
As the debt-to-GDP ratio rises, so too will the vulnerability of the US to future economic shocks, according to the rating agency.
Fitch's downgrade comes 11 years after S&P had downgraded US's perfect rating.
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
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DUNE%3A%20PART%20TWO
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Results
ATP Dubai Championships on Monday (x indicates seed):
First round
Roger Federer (SUI x2) bt Philipp Kohlschreiber (GER) 6-4, 3-6, 6-1
Fernando Verdasco (ESP) bt Thomas Fabbiano (ITA) 3-6, 6-3, 6-2
Marton Fucsovics (HUN) bt Damir Dzumhur (BIH) 6-1, 7-6 (7/5)
Nikoloz Basilashvili (GEO) bt Karen Khachanov (RUS x4) 6-4, 6-1
Jan-Lennard Struff (GER) bt Milos Raonic (CAN x7) 6-4, 5-7, 6-4
Race card
6.30pm: Handicap (TB) $68,000 (Dirt) 1,200m
7.05pm: Meydan Cup – Listed Handicap (TB) $88,000 (Turf) 2,810m
7.40pm: UAE 2000 Guineas – Group 3 (TB) $125,000 (D) 1,600m
8.15pm: Firebreak Stakes – Group 3 (TB) $130,000 (D) 1,600m
9.50pm: Meydan Classic – Conditions (TB) $$50,000 (T) 1,400m
9.25pm: Dubai Sprint – Listed Handicap (TB) $88,000 (T) 1,200m
The five pillars of Islam
UAE currency: the story behind the money in your pockets
The Saga Continues
Wu-Tang Clan
(36 Chambers / Entertainment One)
The%20specs
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The Sky Is Pink
Director: Shonali Bose
Cast: Priyanka Chopra Jonas, Farhan Akhtar, Zaira Wasim, Rohit Saraf
Three stars
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Western Region Asia Cup T20 Qualifier
Sun Feb 23 – Thu Feb 27, Al Amerat, Oman
The two finalists advance to the Asia qualifier in Malaysia in August
Group A
Bahrain, Maldives, Oman, Qatar
Group B
UAE, Iran, Kuwait, Saudi Arabia
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Ferrari
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More from Neighbourhood Watch:
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
if you go
The flights
Air Astana flies direct from Dubai to Almaty from Dh2,440 per person return, and to Astana (via Almaty) from Dh2,930 return, both including taxes.
The hotels
Rooms at the Ritz-Carlton Almaty cost from Dh1,944 per night including taxes; and in Astana the new Ritz-Carlton Astana (www.marriott) costs from Dh1,325; alternatively, the new St Regis Astana costs from Dh1,458 per night including taxes.
When to visit
March-May and September-November
Visas
Citizens of many countries, including the UAE do not need a visa to enter Kazakhstan for up to 30 days. Contact the nearest Kazakhstan embassy or consulate.
SPECS
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Essentials
The flights
Whether you trek after mountain gorillas in Rwanda, Uganda or the Congo, the most convenient international airport is in Rwanda’s capital city, Kigali. There are direct flights from Dubai a couple of days a week with RwandAir. Otherwise, an indirect route is available via Nairobi with Kenya Airways. Flydubai flies to Kinshasa in the Democratic Republic of Congo, via Entebbe in Uganda. Expect to pay from US$350 (Dh1,286) return, including taxes.
The tours
Superb ape-watching tours that take in all three gorilla countries mentioned above are run by Natural World Safaris. In September, the company will be operating a unique Ugandan ape safari guided by well-known primatologist Ben Garrod.
In the Democratic Republic of Congo, local operator Kivu Travel can organise pretty much any kind of safari throughout the Virunga National Park and elsewhere in eastern Congo.
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The specs: Lamborghini Aventador SVJ
Price, base: Dh1,731,672
Engine: 6.5-litre V12
Gearbox: Seven-speed automatic
Power: 770hp @ 8,500rpm
Torque: 720Nm @ 6,750rpm
Fuel economy: 19.6L / 100km
