Tuesday, August 16, 2011

Fitch Maintains US AAA Rating, Outlook Stable

S&P is generally held in higher regard with respect to Sovereign debt then Fitch, but Fitch's rating is important for both psychological and legal reasons. There are certain requirements that portions of investment be kept in AAA rated assets. As long as one of the big rating agencies rates it AAA they can keep it.


"Fitch Ratings on Tuesday confirmed the United States' top-notch credit rating and, in blatant disagreement with rival Standard & Poor's, gave a vote of confidence to Washington's deficit-reduction efforts.

Fitch also kept a stable outlook on its U.S. AAA rating, less than two weeks after S&P downgraded the United States to AA-plus with a negative outlook.

The agency said, however, that it will revisit its decision at the end of the year. It threatened to slap a negative outlook on the rating at that time if lawmakers fail to implement the $2.1 trillion in savings that were agreed earlier this month or if the economy deteriorates significantly.

An outright one-notch downgrade is not ruled out, but less likely, the agency said in a statement. A negative outlook usually means a downgrade is possible in two years.

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