Rating agency Fitch is warning that the United States risks losing its AAA rating, the highest credit rating, if the US government fails to raise the debt ceiling by June 1. Fitch placed the US rating on watch negative, meaning it could be downgraded in the near term.
The US government is at risk of default if President Joe Biden and the Republican opposition fail to reach an agreement on raising the debt ceiling. If an agreement is not reached by June 1, according to the US Treasury Department, the government will run out of money from that date and the country will no longer be able to meet its debts. This would have major financial consequences worldwide.
Fitch is counting on the Democrats and Republicans not to let go and find an agreement before June 1 on raising the debt ceiling. “However, we believe risks have increased that the debt ceiling will not be raised or suspended by then and that the government may default on paying some of its obligations,” the credit bureau said in a report.
The last time the US credit rating was downgraded was in 2011, when the S&P credit bureau downgraded its rating due to wrangling between Democrats and Republicans over the debt ceiling.
“Devoted bacon guru. Award-winning explorer. Internet junkie. Web lover.”