Fitch puts US credit rating on negative watch

New York, May 25

Ratings agency Fitch has put the US credit rating on watch for a possible downgrade on Wednesday, raising the stakes as talks over the country’s debt ceiling go down to the wire, and adding to the jitters in global markets.

Debt deadline looms

• A downgrade could hit the pricing of trillions of dollars of Treasury debt securities
• Fitch now predicts the US government will spend more than it earns, creating a deficit of 6.5% of the country’s total economy in 2023 and 6.9% in 2024

Fitch put the country’s “AAA” rating, its highest rank, on a negative watch in a precursor to a possible downgrade should lawmakers fail to raise the amount that the Treasury can borrow before it runs out of money, which could happen as soon as next week.

On Thursday, stocks in Asia fell as investors remained wary of risky assets due to the hit the global economy will take if the US government defaults. — Reuters