Fitch affirms US rating at AAA: outlook stable
Fitch Ratings has affirmed the United States long-term foreign and local currency Issuer Default Ratings (IDRs) and Fitch-rated US Treasury security ratings at 'AAA'.
Hot Topic
SCIENCE
Fitch Ratings has affirmed the United States long-term foreign and local currency Issuer Default Ratings (IDRs) and Fitch-rated US Treasury security ratings at 'AAA'.
Fitch has simultaneously affirmed the US Country Ceiling at 'AAA' and the Short-term foreign currency rating at 'F1+'. The outlook on the long-term ratings is Stable.
Fitch said the affirmation of the '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'.
Fitch will review its fiscal projections in light of the outcome of the deliberations of the Joint Select committee (due by end November) as well as its near and medium-term economic outlook for the US by the end of the year. An upward revision to Fitch's medium to long-term projections for public debt either as a result of weaker than expected economic recovery or the failure of the Joint Select Committee to reach agreement on at least USD1.2trn of deficit-reduction measures would likely result in negative rating action. The rating action would most likely be a revision of the rating Outlook to Negative, which would indicate a greater than 50% chance of a downgrade over a two-year horizon. Less likely would be a one-notch downgrade.
US sovereign liabilities, both the dollar and Treasury securities, remain the global benchmark and accordingly the US credit profile benefits from unparalleled financing flexibility and enhanced debt tolerance, even relative to other large 'AAA'-rated sovereigns, Fitch said.
NBR staff
Wed, 17 Aug 2011
Wed, 17 Aug 2011
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Fitch affirms US rating at AAA: outlook stable
16414