This afternoon, Fitch Ratings announced it will place the U.S. credit rating in “ratings watch negative,” which could lead to a credit rating downgrade if America fails to pay its bills. With all three major credit rating agencies reiterating their threat to downgrade the nation’s credit rating and only two weeks until a potential government default, it’s time for Republicans to work with Democrats on a big compromise to reduce the deficit and pay America’s bills so that we can give businesses and markets the certainty they need, and prevent the increase in the deficit that would happen if we were to default on our bills.
Fitch: 'AAA' rating in jeopardy
By: Jennifer Epstein
Another major bond rating firm on Monday reiterated its threat to downgrade the U.S. government to a B-plus rating if the debt ceiling isn’t raised by August 2 and the government defaults on its debts.
The warning from Fitch Ratings comes after Moody’s and S&P warned last week that they would lower the U.S. rating from the top mark of AAA if the country is unable to repay its debts next month.
Fitch said Monday that it will place the U.S. rating in what it calls “ratings watch negative,” a status that can lead to downgrading in three-to-six months.
The ratings agency said it still expects congressional Republicans and President Barack Obama to reach a deal in the next few weeks, but would downgrade the rating if the Treasury Department is unable to pay the $90 billion in Treasury bills that mature on August 4.
“Agreement on a credible fiscal consolidation strategy will secure the U.S. ‘AAA’ status; failure to do so will inevitably weaken the sovereign credit profile and may result in a sovereign rating downgrade,” the agency said in a statement.