Paul Krugman Wants To Know 'Inside Story' As Fitch Downgrades US Credit Rating: 'Strange Decision...I'll Be Shocked If Markets React'

Renowned economist Paul Krugman took to X, formerly known as Twitter, to react to Fitch Ratings downgrading the U.S. Long-Term Foreign-Currency Issuer Default Rating (IDR) from ‘AAA’ to ‘AA+’.

What Happened: Krugman, a Nobel laureate and Op-Ed columnist for The New York Times, expressed his doubts about the decision by Fitch.

He stated, “It would be mildly interesting to get the inside story of how Fitch arrived at this strange decision. But I’ll be shocked if markets react at all.”

See Also: Paul Krugman Believes Ratings Agencies Are Just Irrelevant

Why It Matters: The downgrade comes despite the resolution of the debt ceiling crisis two months ago. The decision reflects Fitch’s concerns over fiscal deterioration over the next three years and repeated down-the-wire debt ceiling negotiations.

This marks the second time a major rating agency has stripped the United States of its triple-A rating, the first being S&P in 2011.

Krugman expressed his skepticism stating that rating agencies have “no inside information’ and “a lousy track record” when it comes to sovereign debt.

Read Next: This Day In Market History: U.S. Government Receives First And Only Credit Rating Downgrade

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