Fitch may downgrade US over debt standoff
The US could lose its top credit rating for the second time if there's a delay in raising the country's debt ceiling, Fitch Ratings warned Tuesday.
Congress has to increase the country's debt limit, which effectively rules how much debt the US can have, by March 1 or face a potential default. There are fears that the debate will descend into the sort of squabbling and political brinkmanship that marked the last effort to raise the ceiling in the summer of 2011. The US Treasury Department warned then that it had nearly reached a point where it would be unable "to meet our commitments securely."
Standard & Poor's was so concerned by the dysfunctional nature of the 2011 debate that it stripped the US of its triple A rating for the first time in the country's history.
"The pressure on the US rating, if anything, is increasing," said David Riley, managing director of Fitch Ratings' global sovereigns division. "We thought the 2011 crisis was a one-off event... if we have a repeat we will place the US rating under review."
Fitch already has a negative outlook on the US.
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