The recent agreement on the U.S. debt ceiling has removed the near-term risk to the United States’ AAA sovereign debt rating, according to Fitch Ratings. The agency said, “Without the distraction of a near-term funding crisis for the federal government, Congress and the Administration have the space to focus on the substantive fiscal policy choices … .”
Source: Thinkstock
Fitch also noted that agreement on a “credible” plan for medium-term deficit reduction is likely to preserve the country’s AAA rating and lead to a revision of the agency’s outlook, from “negative” to “stable.” However, if no plan is agreed, then the negative outlook “would likely be resolved with a downgrade later in 2013.”
The federal government still faces the automatic spending cut deadline of March 1 (the sequester) and a March 27 deadline to enact a continuing resolution on the 2013 budget to avoid a government shutdown. Should a deal not be reached by either deadline, Fitch does not anticipate an immediate review but believes that such a failure would “undermine confidence” in the government’s ability ever to reach an agreement.
Take This Retirement Quiz To Get Matched With A Financial Advisor (Sponsored)
Take the quiz below to get matched with a financial advisor today.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the
advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Take the retirement quiz right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.