WASHINGTON (Pakistan Point News / Sputnik - 25th May, 2023) Fitch Ratings has warned that the ongoing political fight over raising the US debt ceiling puts the nation's "AAA" credit rating at risk.
"Fitch Ratings has placed the United States' 'AAA' Long-Term Foreign-Currency Issuer Default Rating (IDR) on Rating Watch Negative," the rating agency said in a statement on Wednesday.
The company said that the decision reflects "increased political partisanship that is hindering reaching a resolution to raise or suspend the debt limit despite the fast-approaching x date," when the US Treasury exhausts its capacity for extraordinary measures without incurring new debt.
Fitch still expects a solution will be found before June 1, the date when the country risks defaulting on its financial obligations.
"However, we believe risks have risen that the debt limit will not be raised or suspended before the x-date and consequently that the government could begin to miss payments on some of its obligations," Fitch Ratings added.
On Wednesday, US House Speaker Kevin McCarthy said that congressional Republican leaders and the White House still remain far apart on certain issues related to raising the nation's $34.1 trillion debt ceiling, prompting him to send negotiators to the White House to resume talks.
US House Republicans passed a plan last month to raise the debt ceiling in exchange for cuts to government spending, although President Joe Biden and Senate Majority Leader Chuck Schumer have rejected the proposal.
