Ratings agency Fitch on Tuesday downgraded the U.S. government's top credit rating by a step, citing a growing federal debt burden and an "erosion of governance" that has manifested in debt limit standoffs.

The decision to downgrade the U.S. from AAA to AA+ sparked a fiery rebuttal from the White House. Treasury Secretary Janet Yellen said in a statement that she "strongly" disagreed with Fitch, calling the change "arbitrary and based on outdated data."

It is the first such downgrade by a major ratings company in more than a decade.

"The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance" relative to peers, said Fitch on Tuesday.

In May, Fitch had placed the country's credit on "rating watch negative," reflecting increased political partisanship that hampered a resolution to raise or suspend the debt limit ahead of a looming deadline.

A Moody's Analytics report from May said a downgrade of Treasury debt would set off a cascade of credit implications and downgrades on the debt of many other institutions.

Other analysts had pointed to risks that another downgrade by a major ratings agency could affect investment portfolios that hold top-rated securities.

Ed Mills, an analyst from Raymond James, however, said on Tuesday he did not anticipate markets to react significantly to the news.

"My understanding has been that after the S&P downgrade a lot of these contracts were reworked to say 'triple-A' or 'government-guaranteed', and so the government guarantee is more important than the Fitch rating," he said.

(With input from AFP, Reuters; Cover via CFP)