U.S. Debt Receives Downgrade From China

Dagong Global Credit Rating, a Chinese firm that rates sovereign debt, has announced it is downgrading U.S. government debts.

The company cut the credit rating for U.S. debt from AA to A+, citing a Federal Reserve plan to purchase bonds as the primary reason.

Company officials say this may spur inflation and potentially erode the value of the dollar, according to a report by Business Standard. Dagong also cited a drop in the government's intention to repay debt and a deterioration of its ability to do so, among issues of concern.

"Many countries are worried about the impact of the policy on their economies," China's vice foreign minister Cui Tiankai said at a conference, Business Standard says. “It would be appropriate for someone to step forward and give us an explanation, otherwise international confidence in the recovery and growth of the global economy might be hurt.”

The downgrade now places U.S. debt at a lower value than China's. However, it is still considered among the safest investments in the world, garnering high rankings from western ranking agencies and offering low interest rates, NPR reports.