Fitch - US could lose AAA rating by 2013
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Fitch has warned that the US may lose its AAA rating by the end of 2013 unless politicians form a realistic plan to address the nations growing debt burden.
Fitch placed the US credit rating on negative last month citing the failure of politicians to agree to a £700bn deficit-reduction deal. Fitch says a further £2.2trn of additional deficit measures must be introduced to stabilize the federal debt held by around 90 per cent of GDP in the latter half of this decade.
It says: “Federal debt will rise in the absence of expenditure and tax reforms that would address the challenges of rising health and social security spending as the population ages,
“The high and rising federal and general government debt burden is not consistent with the U.S. retaining its ’AAA’ status despite its other fundamental sovereign credit strengths.”
Standard & Poor’s cut its AAA rating of the US to AA+ in August, while Moody’s has also threatened to downgrade the country’s credit rating.
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