Fitch places “Rating Watch Negative” on US debt as X-date moves closer

Following the negotiations over the debt ceiling, Fitch Ratings has expressed concern regarding the United States' debt, resulting in a placement of the nation's highest-rated bonds on a "Rating Watch Negative."

In a press release issued late on Wednesday, Fitch stated that the negative rating watch reflects the escalating political divisions that impede the attainment of a resolution to raise or suspend the debt limit, despite the approaching X-date. While Fitch still maintains an expectation of a debt limit resolution prior to the X-date, the agency highlights an increasing risk of potential payment defaults on certain obligations.

However, Fitch offers a glimmer of optimism to certain investors by reiterating the overall strength of the United States' credit. The firm emphasises that even in the event of a debt default, Fitch anticipates the U.S. country ceiling to retain its 'AAA' rating.

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Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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