Fitch reaffirms U.S. triple-A rating after debt deal approval
Minutes after the Senate approved the bipartisan deal to raise the debt ceiling Tuesday, Fitch Ratings affirmed its triple-A credit rating for the United States.
The increase of at least $2.1 trillion in the $14.3 trillion debt ceiling means "the risk of sovereign default remains extremely low," Fitch said in a statement.
"The fundamental economic and financial underpinning of the United States' 'AAA' status remains strong despite the heated political debate over the role of government and how best to reduce the out-sized federal budget deficit," said Fitch, one of the three leading credit-rating agencies.
Fitch said the deal, which President Obama is expected to sign shortly, shows that "there is the political will and capacity to ultimately do the right thing." The deal is "an important first step" toward a long-term plan to reduce the nation's soaring budget deficit "that would secure the United States' 'AAA' status over the medium-term," the credit-rating agency said.
Fitch's move was expected given its past statements. Moody's Investor Services also is expected to reaffirm its triple-A rating on U.S. debt.
The wild card is Standard & Poors, which still could downgrade its U.S. credit rating because the spending cuts of at least $2.1 trillion in the deal fall short of the $4 trillion over the next 10 to 12 years that the firm has indicated were needed.
But S&P backed off that standard last week, so its unclear what it will do.
-- Jim Puzzanghera
Photo: Fitch Ratings office in London. Credit: Bloomberg