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Fitch Holds US Rating on Negative Watch Despite Debt Deal

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Ratings agency Fitch said Friday that it is keeping the United States’ “AAA” credit rating on negative watch, despite a bipartisan agreement on raising the debt limit to avert a catastrophic default. breaking news

The decision came a day after US senators voted to suspend the federal debt limit, capping weeks of fraught negotiations to eliminate the threat of a disastrous credit default just four days ahead of a deadline set by the Treasury.

Hammered out between Democratic President Joe Biden and Republican leaders, the measure passed the Senate with a comfortable majority a day after sailing through the House of Representatives.

While the resolution of the debt ceiling impasse means the US government will be able to meet its obligations, Fitch Ratings said it maintains a “Rating Watch Negative” on the United States.

This comes “as we consider the full implications of the most recent brinkmanship episode and the outlook for medium-term fiscal and debt trajectories,” Fitch added in a statement.

It said that it intends to resolve the negative watch in the third quarter of 2023.

“The coherence and credibility of policymaking, as well as the expected medium-term fiscal and debt trajectories will be key factors in our assessment,” the statement said.


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