Fitch maintains AA+ credit rating for the U.S. despite governance challenges.🇺🇲⚙️
Fitch Ratings, a renowned international credit rating agency, has upheld the United States' long-term foreign currency credit rating at "AA+" with a stable outlook. This confirmation is underpinned by various economic strengths, including the sheer size of the U.S. economy, high per capita income, and a dynamic business environment.
However, the report also sheds light on governance challenges that have emerged over the past two decades. Notably, increased political polarization and complexities surrounding budget processes, driven by concerns about debt limits and government shutdowns, have contributed to a decline in governance standards.
One of the key strengths supporting the credit rating is the U.S.'s status as a provider of the leading global reserve currency, the U.S. dollar. Fitch recognizes the country's ability to export its currency without relying on extraordinary financial flexibility.
Nevertheless, the affirmation comes with a cautionary note about the impact of governance issues on fiscal confidence. The report suggests that these challenges may hinder the implementation of a reliable medium-term fiscal consolidation plan, raising concerns about the nation's financial trajectory.
Looking ahead, Fitch Ratings highlights the upcoming presidential and congressional elections as pivotal moments that could significantly shape policies, legislations, and the overall governance landscape. The outcomes of these elections are expected to have a profound impact on the trajectory of the United States' economic policies.
The U.S. maintains a strong "AA+" credit rating, reflecting enduring economic strengths. Governance challenges need attention for a sustainable fiscal future, with upcoming elections pivotal for the nation's global economic direction.
