The international rating agency Fitch Ratings has placed the US long-term foreign currency issuer default rating at “AAA” on Rating Watch’s “Negative” list. The decision is explained by the fact that the country’s authorities are inactive on the issue of the public debt ceiling, according to the agency’s website.
Rating Watch Negative reflects heightened political partisanship hampering decisions to raise or suspend the debt ceiling
- underlined in the message.
The agency assessed as high risks that the debt limit will not be raised or suspended before the United States begins to miss payments on a number of its obligations.
The inability of U.S. authorities to meaningfully address medium-term fiscal issues that will lead to a growing fiscal deficit, and a growing debt burden signal risks of reduced U.S. solvency
— specified in Fitch Ratings.
The agency’s decision to downgrade the outlook for the US rating to negative follows the country’s Bureau of Economic Analysis announcing a record drop in the economy in the second quarter of 2023 – by nearly 33 % in annual terms.
Earlier, CNN reported that even if Republicans and the White House end up making some sort of decision on the debt ceiling, there may not be enough time to implement it until June 1. . Market experts believe the default will shatter the country’s financial system, although the one-time consequences are not so noticeable, CNN said.
Photos used: pxfuel.com
Read the Latest Government Politics News on The Eastern Herald.
