Fitch puts US credit rating on negative watch

Fitch reported that the US long-term foreign currency credit rating, which is ‘AAA’, is on negative watch.

In a Fitch statement, the decision in question requires a decision to increase or suspend the debt limit, despite the fact that the federal government has reached the debt limit of $31.4 trillion and the extraordinary measures of the Treasury Department to avoid that the debt limit is exceeded are soon. depleted and cash tight, it was reported to reflect growing political partisanship making it difficult

“However, the debt limit will not be raised or suspended before date X and, as a result, the government will stop payments on some of its obligations,” the statement said. We believe that the risks that it could start are increasing. .” the evaluation was done.

The policy of escalating the debt limit points to downside risks to the solvency of the United States, with the inability of the US authorities to meaningfully address medium-term fiscal challenges that will lead to higher budget deficits. and a higher debt burden.

CRITICAL DATE JUNE 1

The US reached the debt limit of $31.4 trillion on January 19 and the US Treasury began taking extraordinary measures to avoid exceeding the limit.

The Treasury Department had warned that such extraordinary measures could run out as soon as June 1.

Despite the proximity of the date, an agreement has not yet been reached in the negotiations between the White House and the Republicans to increase the budget limit. (AA)