Mohamed El-Erian 'Puzzled' Over Fitch Downgrade: 'Likely To Be Dismissed Than Have A Lasting Disruptive Impact'

Renowned economist Mohamed A. El-Erian expressed that he is “puzzled” over Fitch Ratings’ unexpected downgrade of the U.S. sovereign credit rating from AAA to AA+. El-Erian anticipates that many economists and market analysts will share his confusion over the timing and reasons behind this decision.

What Happened: The economist questioned the timing and the reasons cited by the rating agency in his tweet. El-Erian’s tweet suggests that the downgrade is more likely to be dismissed than to have a lasting disruptive impact on the US economy and markets.

“Overall, this announcement is much more likely to be dismissed than have a lasting disruptive impact on the US Economy and Markets,” he wrote.

See Also: ‘Rich Dad, Poor Dad’ Author Says Brace For Crash Landing As Fitch Downgrades US Credit

Why It Matters: Fitch Ratings justified the downgrade by citing several factors, such as expected fiscal deterioration over the next three years, a high and growing general government debt burden and erosion of governance.

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

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

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