Rating agency Fitch dropped a bombshell late Tuesday, leaving analysts and economists confused. Even as the U.S. economy is chugging along nicely despite the encircling uncertainties, the firm downgraded U.S.'s long-term rating from "AAA" to "AA+."

The firm, however, removed the "rating watch negative" assigned a "stable outlook" and reaffirmed the country ceiling to "AAA."

Summers, El-Erian Weigh In: Reacting to the downgrade, former Treasury Secretary Larry Summers said Fitch's decision to downgrade the U.S. at a time the economy is looking stronger than expected is “bizarre and inept.”

Summers, however, conceded that the country is facing serious long-run fiscal challenges.