Fitch Ratings has placed the United States of America’s “AAA” long-term foreign currency ratings on rating watch with negative implications. This is due to the increasing uncertainty surrounding the country’s fiscal outlook and the potential for further deterioration in the government’s debt burden.
The agency noted that the U.S. government’s debt burden has risen significantly since the onset of the COVID-19 pandemic, and that the government’s fiscal position is likely to remain weak for the foreseeable future. Fitch also highlighted the potential for further fiscal stimulus measures, which could further increase the government’s debt burden.
The agency said it will continue to monitor the situation and will take appropriate action if the government’s fiscal position deteriorates further. It also noted that the U.S. government’s ability to manage its debt burden and maintain its creditworthiness will be key to the outcome of the rating watch.
The U.S. government’s creditworthiness is of paramount importance to the global economy, and Fitch’s decision to place the country’s ratings on watch is a reminder of the need for fiscal discipline and prudent management of public finances.