Since March this year, the closure of Silicon Valley Bank, Signature Bank and First Republic Bank has caused turmoil in the U.S. banking sector, triggering market concerns and stock price volatility.。On the 7th local time, Moody's, one of the three major international credit rating agencies, announced that it would downgrade the credit ratings of 10 small and medium-sized U.S. banks, and put the credit ratings of six large U.S. banks on the downgrade watch list, while the outlook for 11 U.S. banks was set as negative.。Affected by this, the New York stock market on August 8, the three major stock indexes fell across the board, bank stocks suffered a heavy setback。

Just into August, the U.S. Treasury Department exploded a big thunder: the world's leading rating agencies announced that the U.S. long-term foreign currency issuer default rating from AAA to AA +, as never play unprepared battle Fitch, but at this time announced the downgrade, exactly why？Market participants believe that Fitch's final decision to downgrade the U.S. default rating of the "fuse," is the U.S. Treasury Department released on July 31, the third quarter of the U.S. financing plan.。Under the plan, the U.S. Treasury will borrow about $1 trillion in debt in the third quarter of 2023, nearly $300 billion more than previously announced plans to issue debt.。That's not all, and on top of that, the U.S. is expected to borrow about $852 billion more in debt in the fourth quarter, which will be another debt surge of nearly $100 billion.。Faced with such a high debt scale, the U.S. Treasury Department said there are two main reasons for the huge debt issuance, first, the current low cash balance in the fiscal deposit account, and second, the expected future fiscal revenue is low, but the expenditure is higher.。It's an indisputable fact that the U.S. government is high on fiscal denunciations in 2023, so where did all that money go?？Based on data for the first nine months of fiscal 2023, there were four projects with large year-on-year increases in fiscal spending for the year.。First, net interest expenses, the sharp increase in this expenditure is mainly due to the Fed's aggressive interest rate hikes, raising the cost of debt during the year;。

On August 1, local time, Fitch, one of the world's three major international credit rating agencies, announced that it had downgraded the sovereign credit rating of the United States, from the original AAA rating to the current AA + rating, for example, everyone has their own "credit background," if your credit is good, every loan must be repaid, then occasionally encounter the situation of turnover, we will also rely on borrowing money to help, but, if you often do not repay the。The same is true for a country, the U.S. sovereign credit rating is a depiction of the U.S. "credit background," the highest AAA rating on behalf of the U.S. ability to repay debt is extremely strong, the risk of default is extremely low, the market can safely buy U.S. Treasury bonds.。There are two main reasons for Fitch's downgrade of the U.S. sovereign credit rating.。First, Fitch is concerned that the Biden administration's finances have begun to deteriorate and that the debt burden is high and will grow over the next three years.。Second, Fitch expects the Fed to raise interest rates by a further 25 basis points in September, and the U.S. economy may fall into a "mild" recession due to the current market environment.。Of course, Fitch's downgrade of the U.S. sovereign credit rating is not without warning.。As early as May 24 this year, Fitch announced that it would put the U.S. AAA rating on a "negative watch list" due to the standoff over the U.S. debt ceiling, and suggested a possible downgrade of the U.S. credit rating.。At the time, U.S. Treasury Secretary Yellen had repeatedly warned Congress that if Congress failed to adjust the federal government's debt ceiling to lead to a default on its debt, it would trigger an "economic disaster."。