US Credit Rating Under Surveillance by Fitch

Fitch has announced that it has placed the US AAA credit rating under watch in preparation for a possible downgrade in light of the risk of a Washington default.

The agency said in a statement that its decision “reflects rising political tensions that prevent a solution to the problem by raising or suspending the public debt ceiling as the deadline for U.S. public debt to reach its statutory ceiling is fast approaching. .”

And on Monday, talks between President Joe Biden and Speaker of the House Kevin McCarthy ended without reaching an agreement on how to raise the national debt ceiling by $31.4 trillion.

The Democratic President and the top Republican politician in Congress are hard at work making progress towards an agreement.

McCarthy pressured the White House to agree to federal spending cuts that Biden called “draconian.”

Biden, on the other hand, has called for new taxes on the rich, which Republicans reject.

“I feel like we had a productive discussion … but we don’t have an agreement yet,” McCarthy told reporters after an hour-long Oval Office talks with Biden, adding that both sides would continue consultations.

The two sides have only a few days to reach an agreement on raising the federal government’s debt ceiling, otherwise it could default in an unprecedented way, and experts warn that such a scenario could lead to a recession.

Source: AFP.

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