U.S. Still 'AAA,' According to Fitch Ratings
Standard & Poor’s lowering of the U.S. credit rating has stirred doubt and concern across the globe. However, a more hopeful outlook has now been given as another rating agency, Fitch Ratings, officially upheld the country’s AAA rating on Tuesday.
Fitch Ratings, a global credit rating agency that provides research and data, said the U.S. seemed stable but that the country had a lot of work to do.
"The affirmation of the US 'AAA' sovereign rating reflects the fact that the key pillars of US's exceptional creditworthiness remains intact: its pivotal role in the global financial system and the flexible, diversified and wealthy economy that provides its revenue base," Fitch said in a statement on Tuesday.
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"Monetary and exchange rate flexibility further enhances the capacity of the economy to absorb and adjust to 'shocks.'"
Pierre Ellis, senior economist for “Decision Economics,” said that S&P had reason to be concerned with the national debt.
"S&P had a very specific basis for their concern which was that there was no long-run plan for budget control," Ellis said, according to Reuters.
Ellis has said Fitch may have been optimistic with its announcement.
"Fitch certainly is correct with respect to the breadth of the United States' potential revenue sources...it is putting a little more faith in the common sense of Congress and the Administration with respect to getting the budget situation under control," he said, according to Reuters.
Although Fitch has seemingly put faith in the U.S. economy, the agency also said the national rating could decrease over the next few years if improvements were not made.
"The rating action would most likely be a revision of the rating Outlook to Negative, which would indicate a greater than 50 percent chance of a downgrade over a two-year horizon. Less likely would be a one-notch downgrade," the Fitch statement said.
According to Business Week, U.S. treasuries will receive the biggest gain this month since December 2008. However, American bonds are currently cheaper than other countries with the same rating.
