Fitch Puts U.S. Rating On Negative Watch
” Fitch Ratings Service put the U.S. credit rating on negative watch, as the political leaders in Washington failed to reach on agreement on the budget standoff.
The Fitch warning comes as the House and Senate work on competing plans to raise the U.S.’s borrowing limit and fully reopen the federal government. The Treasury Department, which has used extraordinary steps to continue paying its bills for roughly two weeks, says it will exhaust those powers on Thursday.
Fitch said a failure by the government to honor interest or principal payments on U.S. Treasury securities would lead it to downgrade the U.S.’s sovereign issuer-default rating to “restricted default.”
After the Dow tumbled 133 points during Tuesday’s trading session, Dow futures are down another 122 points in late trading after the Fitch move. The ratings firm maintained its triple-A rating on the U.S. and said it expects to make a call on the rating by the end of the first quarter at the latest.
Fitch warned last week that without a “timely” debt-ceiling deal, it’d put the US’ rating on negative review. Now being two days away from hitting the debt cap, Fitch must feel it’s too close for comfort.”
As someone wiser than us is wont to say “We’re in the best of hands.”
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