Fitch placed USA on negative watch back in May, now has cut the US rating from triple A

From back in May, news that Fitch was casting a very very wary eye at the USA on the debt ceiling debacle and US governance difficulties:

• Fitch is out with something of an ominous warning on the US credit rating
• United States' 'AAA' rating watch negative reflects increased political partisanship that is hindering resolution to raise or suspend debt limit

And now, action from the agency:

• Fitch downgrades USA long-term credit rating to AA+ from AAA

Fitch is very much the #3 rating agency behind S&P and Moody's, but still, this is not a positive development for holders of US sovereign bonds. Some funds, for example, are mandated to only hold AAA-rated sovereign bonds.

Lets see if the bigger two agencies follow suit.

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Of more concern, I reckon, is the timing of Fitch dropping this bombshell. US regular market hours are closed. If the plan was to trigger market chaos this timing would be pretty close to the #1 option.

So far the markets that are open (hello FX traders) are relatively subdued.