Fitch Affirms United States at AAA; Outlook Stable

Fitch Ratings has confirmed the United States' top-notch credit rating and kept a stable outlook on its U.S. AAA rating, less than two weeks after S&P downgraded the United States to AA-plus with a negative outlook, reports Reuters.

 

However, Fitch leaves open the possibility of downgrading the rating to a negative outlook if US lawmakers fail to implement the $2.1 trillion in savings that were agreed earlier this month or if the economy deteriorates significantly.

 

Another ratings agency, Moody's Investors Service confirmed the U.S. AAA rating earlier this month, but with a negative outlook, threatening to downgrade it in the next two years for the same reasons Fitch raised, says Reuters.

 

Fitch's affirmation of the US 'AAA' sovereign rating reflects the fact that the key pillars of US's exceptional creditworthiness remains intact: its pivotal role in the global financial system and the flexible, diversified and wealthy economy that provides its revenue base.

 

Monetary and exchange rate flexibility further enhances the capacity of the economy to absorb and adjust to 'shocks'.

 

The world's three leading credit rating agencies now have three slightly divergent views of America's creditworthiness: still the top AAA rate and stable outlook for Fitch, AAA but negative outlook for Moody's and AA+ for Standard & Poor's.

 

It is unclear how companies and other organisations issuing debt and the investors that buy them will negotiate this new terrain. S&P has not changed its corporate ratings as a result of the sovereign downgrade, but further downgrades will surely rattle markets and affect assessment of the risk carried by both US sovereign and corporate debt.

 

 

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