Fitch downgraded the United States' top-notch credit rating by a step on Tuesday, citing a growing federal debt burden and an 'erosion of governance' that has manifested in debt limit standoffs.
WASHINGTON, United States -- Fitch downgraded the United States' top-notch credit rating by a step on Tuesday, citing a growing federal debt burden and an "erosion of governance" that has manifested in debt limit standoffs.
It is the first such downgrade by a major ratings company in more than a decade. A debt ceiling impasse in 2011 saw S&P lower Washington's AAA rating, drawing bipartisan outrage. While the lifting of the US debt ceiling -- a limit on government borrowing to pay for bills already incurred -- was often routine, it has for several years become a contentious partisan issue.There is a "clear short-run implication" of the downgrade involving higher bond yields and a potential sell-off in the stock market and the dollar, said Mickey Levy of Berenberg Capital Markets.
But "psychological support for dollar-denominated debt" could take a hit in the short-term, interfering with Treasury auctions at a time when it needs to ramp up the size of issuance, he said.In May, Fitch had placed the country's credit on "rating watch negative," reflecting increased political partisanship that hampered a resolution to raise or suspend the debt limit ahead of a looming deadline.
"The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management," Fitch added.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
US says formally invites new Chinese foreign minister Wang Yi to WashingtonThe United States has formally invited China’s newly reappointed foreign minister, Wang Yi, to Washington, the U.S. State Department said on Tuesday, after Wang’s predecessor was abruptly removed from his post by Beijing. | Reuters
Read more »
US hits Chinese firm working in Manila BayIn a statement, the US said the projects would have ill effects “on the environment, the resilience to natural hazards of Manila and nearby areas, and to commerce” in the area. READ MORE:
Read more »
Pagasa: Falcon may become super typhoon outside PAR on Tuesday afternoonTropical Cyclone Wind Signal No. 1 may be raised in Batanes due to Typhoon FalconPH, which could transform into a super typhoon outside the Philippine area of responsibility, state meteorologists said on Tuesday. | JEMendozaINQ
Read more »
PAGASA: ‘Falcon’’ to exit PAR by Tuesday afternoon, heads toward Okinawa, JapanUPDATE: Typhoon FalconPH is expected to exit the Philippine Area of Responsibility by Tuesday afternoon or evening as it moves toward the waters of Okinawa Islands in Japan, the state weather bureau said.
Read more »
PH calls on 5 nuclear weapons states to report disarmament obligationsTHE Philippines has called on the five nuclear weapons states (NWSs) to report on their disarmament obligations to allow all state parties to scrutinize them, the Department of Foreign Affairs (DFA) said.
Read more »