The latest warning comes from credit agency Fitch Ratings. Find the story here and here.
A Fitch Ratings executive warned the firm would downgrade the U.S.’s triple-A credit rating if the government doesn’t get its fiscal house in order. A potential downgrade could send shockwaves through financial markets, similar to how S&P jolted markets last summer when it stripped the U.S. of its top credit rating.
From the Wall Street Journal summary of the Fitch meeting:
Speaking at the firm’s global banking conference in New York, Fitch sovereign group managing director Ed Parker said “the U.S. does not have a credible fiscal consolidation plan” and that “If we don’t see one after the election, I would expect a downgrade.”
Fitch rates the U.S. at triple-A but put it on negative outlook earlier this year, and Parker’s comments were a reiteration of the firm’s position. Fitch has the U.S., U.K. And France on negative outlook because of high debt-to-GDP ratios.
Parker noted that the three countries, plus Germany, have the top credit ratings but are also the most heavily indebted nations.
“There is a limit to how high these government debt levels can go,” Parker said.