Rating agency Fitch Ratings on Wednesday lowered its long-term outlook on US debt, which it rates at AAA, the highest possible level, to “negative” due to the risk of default by the country.
In general, this move suggests that a downgrade of the company’s debt rating is likely in the near future.
The decision “reflects political tensions hindering resolution of the issue” which would be provided “by raising or suspending the federal debt limit” as “the deadline is fast approaching,” Fitch explained.
The Democratic President Joe Biden’s administration and the Republican opposition are continuing tough talks to raise the federal borrowing limit by Congress to avert the risk of an unprecedented government default on June 1 that would have catastrophic consequences for the US and global economy.
Source: RES-IPE
Source: Kathimerini
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