Fitch confirmed on Tuesday its triple-A rating of the United States but warned the country’s medium-term debt profile appears “at the limit” of what would merit its top credit grade.
The agency also said the deterioration of the economy or the failure of a special congressional committee to slash fiscal deficits could lead to a reassessment of the rating and a possible cut by the end of the year.
“The affirmation of the US ‘AAA’ sovereign rating reflects the fact that the key pillars of US’s exceptional creditworthiness remain intact: its pivotal role in the global financial system and the flexible, diversified and wealthy economy that provides its revenue base,” Fitch Ratings said.
“Monetary and exchange rate flexibility further enhances the capacity of the economy to absorb and adjust to ‘shocks,’” Fitch said, praising the US economy as one of the most productive and business friendly in the world.
“Fitch continues to forecast that the US economy (and tax base) will, over the medium term, be one of the most dynamic amongst its high-grade and ‘AAA’ peers,” it said.
But it also highlighted the problems singled out by rival rating agency Standard & Poor’s when it dealt the country its first-ever downgrade on August 5.
“The fiscal profile of the US government has deteriorated sharply and is set to become an outlier relative to ‘AAA’ peers,” Fitch said.