S&P downgrades U.S. credit rating from AAA for the first time since 1917

The back and forth came after Standard & Poor’s, one of the world’s three major credit rating agencies, cited “difficulties in bridging the gulf between political parties” as a major reason for the downgrade from U.S.’s top shelf AAA status to AA+, the next level down. The rating agency has essentially lost faith in Washington’s ability to work together to address its debt.

The downgrade, hours after markets closed on Friday, is a first for the U.S. since it was granted an AAA rating in 1917. S&P warned about a downgrade as far back as April. Its decision came just four days after fractious debate over raising the nation’s debt ceiling ended in a compromise that would reduce the country’s debt by more than $2 trillion (euro1.41 trillion). S&P said Friday the cuts did not go far enough.