News

USA credit rating outlook revised to negative from stable by Fitch

Bold move by the rating agency

The rating was affirmed at AAA but lowered to negative from stable. That’s how you get yourself a lawsuit.

  • Cites ongoing deterioration in public finances
  • Sees general debt to GDP above 130% by 2021
  • Expects deficit to narrow to 11% of GDP in 2021
  • Expects US economy to contract 5.6% this year
  • Statement

What Fitch had to say:

The Outlook has been revised to Negative to reflect the ongoing deterioration in the U.S. public finances and the absence of a credible fiscal consolidation plan, issues that were highlighted in the agency’s last rating review on March 26, 2020. High fiscal deficits and debt were already on a rising medium-term path even before the onset of the huge economic shock precipitated by the coronavirus. They have started to erode the traditional credit strengths of the US.

They’re not wrong.

Another risk they cite is the possibility of policy gridlock after the election because neither party will get a 60-seat Senate majority.

For bank trade ideas, check out eFX Plus

Articles You May Like

WTI crude oil futures settle at $52.36
The FOREX STRATEGY That Bought Me 10 CARS | My SECRET Revealed!
Major indices close lower after giving up earlier gains
Fitch Affirmed New Zealand’s Foreign-Currency IDR at ‘AA’; Outlook Positive
The JPY is the strongest and the AUD is the weakest as the NA session begins

Leave a Reply

Your email address will not be published. Required fields are marked *