Saturday, June 10, 2023

Rating booster Fitch puts US debt on “negative watch”

NEW YORK – The Fitch agency put the United States’ debt rating on Wednesday on “negative watch”, which has the highest level (AAA) firm, due to the lack of progress between the Democratic and Republican parties to reach a budget agreement. avoids suspension of payments.

The agency noted that this intention to reduce the possible “reflects the growth of political parties that opposes the resolution of the goal of paying or suspending the debt term despite the fast proximity of the 10th day”, around June 1.

It’s the 10th day since the Treasury Department estimates that the country’s aid will benefit if Congress agrees to lift the debt ceiling, which was reached in January, and the legal way the government can borrow money.

Fitch said that he hopes “the resolution of the payment of the debt limit before the 10th day”, but he believes that the risks of “increasing” have not before that moment to be raised or suspended and that “therefore, the Government may begin to default on certain obligations”.

Despite everything, the management of its message is qualified, indicating that it considers “high probability” that the US will not comply with the payments of the debt securities “in full and on time”, and also the expectation of this “will”. remain in “AAA” even in the scenario of suspension of credits.

President Joe Biden and the leader of Republicans in Congress, Kevin McCarthy, stated that this Wednesday the suspension of payments is not an option and to move forward, but the situation is stuck, since the president refuses to accept the demands of the opposition. for less than a year.

A Consumer Reports investigation revealed some flaws that require careful consideration.

While US debt is often considered a safe asset in the financial markets, from time to time the country faces default because the government can only borrow up to a limit set by Congress.

In general, the country tends to raise or suspend the border without conditions, as the White House demands, and this is what has happened on more than 70 occasions since the 1970s.

In 2011, a situation very similar to today resulted in the reduction of the credit rating of the country’s risk agency Standard & Poor’s from “AAA” to “AA+”.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
Latest news
Related news


Please enter your comment!
Please enter your name here