Fitch Considers US Regime Rating Downgrade as Debt Talks Drag

Source: Wall Street Journal

“Fitch Ratings is reviewing whether the U.S. should retain its top credit rating as the White House and Republicans struggle to reach an agreement on raising the debt limit. Fitch said Wednesday evening it had placed the U.S. triple-A credit rating on ‘rating watch negative.’ While the ratings firm said it still expects Democrats and Republicans to reach an agreement on raising the debt limit, it said there was a greater risk it could fail to do so in time. … Fitch said that a missed payment after June 1 would likely be inconsistent with a triple-A rating. The ratings firm also said that potential workarounds — like invoking [non-existent presidential powers in] the 14th amendment to ignore the debt limit — would undermine U.S. creditworthiness.” (05/24/23)