Fitch Outlook Warning for U.S.
November 28, 2011 by Jon C. OggFitchRatings is affirming the “AAA” rating of the United States. Unfortunately, the ratings agency is cutting the outlook on the long-term rating to NEGATIVE from STABLE. As noted: Fitch’s current assessment is that the U.S. economic recovery will regain momentum in the latter half of next year and into 2013, and that a period of above trend growth will be subsequently followed by growth of at least 2.25% over the long-term. However, Fitch recognises that there is considerable uncertainty surrounding the economy’s potential output and scope for a period of above trend economic growth… with negative implications for the medium to long-term fiscal outlook.
Other notes:
- federal debt held by the public exceeding 90% of GDP;
- debt interest consuming more than 20% of tax revenues by the end of the decade
- including the debt of state and local governments, gross general government debt will reach 110% of GDP by the end of the decade
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