November 29, 2011
FITCH Ratings has lowered its outlook on the US sovereign debt rating to negative, saying high debt levels and a troubled economic outlook could endanger its top-credit status.
Fitch this morning affirmed its triple-A rating on the US -- the highest possible rating -- citing the nation's strong economic fundamentals and credit metrics.
The US dollar and treasury securities remain global benchmarks, the ratings service said, putting the US in a position that gives it the benefit of minimal financing risks and low fiscal-funding costs.
At the same time, Fitch said uncertainty surrounding the US economy's potential output is clouding the country's medium to long-term fiscal outlook.
Fitch also said high federal debt could reach a point that is inconsistent with a triple-A status and threatens to limit the government's ability to respond to future economic and financial crises.
In August, Fitch warned it could lower its outlook on the country if a congressional committee created to reach a deficit-reduction deal failed to meet its targets by its November deadline. That deadline passed last week and the targets were not met.
Fitch was the last of the top three ratings agencies to lower its outlook on US debt.
Moody's Investors Service gave the country a negative outlook in August. Standard & Poor's cut its rating on US debt to double-A-plus in August and maintained a negative outlook on the debt.
Article by Drew FitzGerald From: Dow Jones Newswires