Bold move by the rating agency
The rating was affirmed at AAA but lowered to negative from stable. That's how you get yourself a lawsuit.
- Cites ongoing deterioration in public finances
- Sees general debt to GDP above 130% by 2021
- Expects deficit to narrow to 11% of GDP in 2021
- Expects US economy to contract 5.6% this year
- Statement
What Fitch had to say:
The Outlook has been revised to Negative to reflect the ongoing deterioration in the U.S. public finances and the absence of a credible fiscal consolidation plan, issues that were highlighted in the agency's last rating review on March 26, 2020. High fiscal deficits and debt were already on a rising medium-term path even before the onset of the huge economic shock precipitated by the coronavirus. They have started to erode the traditional credit strengths of the US.
They're not wrong.
Another risk they cite is the possibility of policy gridlock after the election because neither party will get a 60-seat Senate majority.
