U.S. political polarization means Fitch debt downgrade is here to stay, economist says

Growing political instability means the U.S. will not regain its AAA rating with Fitch for the foreseeable future, according to Elliot Hentov, head of macro policy research at State Street Global Advisors.

Global stock markets fell sharply on Wednesday after ratings agency Fitch downgraded the United States’ long-term foreign currency issuer default rating from AAA to AA+, citing “expected fiscal deterioration over the next three years” and an erosion of governance in light of “repeated debt-limit political standoffs and last-minute resolutions.”

Big-name bank bosses and economists dismissed the decision,…