‘Vindicating’: An Analyst Who Lowered the U.S.’s Credit Rating in 2011 on Fitch’s Downgrade

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When Nikola Swann heard that Fitch Ratings had removed the United States from its list of risk-free borrowers this week, he felt a sense of satisfaction. “It was vindicating,” he says. More than a decade ago, Swann played a key role in a similar decision: He was Standard & Poor’s primary analyst for its sovereign credit rating on the United States when the agency became the first ever to downgrade the nation’s long-term credit rating amid a debt ceiling standoff in 2011. At the time, the move was controversial, in part because the Treasury Department pointed out that S&P had overstated the federal debt by about $2 trillion. Bloomberg called the reasons for the downgrade “fundamentally political” in 2011, while others argued that it appropriately reflected a worsening debt crisis. Both a decade ago and this week, partisan politics were cited as one reason for the downgrade. S&P cited “the gulf between the political parties.” Fitch, which made the call two months after the United States narrowly avoided defaulting on its debt, cited “the repeated debt-limit political standoffs and last-minute resolutions.”