Fitch lowers United States rating outlook

Fitch lowers United States rating outlook


Ratings agency Fitch said it will keep its rating for long-term U.S. debt at the top AAA level, despite a congressional panel’s failure to agree on long-term deficit cuts. But it is lowering its outlook to negative. Meanwhile, Standard & Poor’s said it could also downgrade the outlook on France’s triple-A rating.

Fitch said it has less confidence in the U.S. government’s ability to take the necessary steps to rein in the deficit, according to an Associated Press report.

Moody’s Investors Services and Standard & Poor’s also left their U.S. ratings unchanged last week. But Moody’s threatened to lower its rating if Congress backed off $1.2 trillion in automatic cuts scheduled over the next decade.

S&P downgraded long-term U.S. debt in August to the second-highest level, AA-plus. It came days after Congress barely resolved a prolonged fight over raising the nation’s borrowing limit.

In another development, a French newspaper said S&P could change the outlook on France’s triple-A rating to negative “within days,” in a move signalling a possible downgrade.

Citing several sources, La Tribune reported yesterday that S&P was carrying out an “intense reflection” on whether to change its outlook on French government debt to negative.

May happen in 10 days

“This could happen within a week or maybe 10 days,” one of the newspaper’s sources said, according to Agence France-Presse.

The paper’s sources said the outlook change had been due to be announced on Friday, but had been delayed for unknown reasons.

S&P earlier this month erroneously announced it was downgrading France’s cherished top credit rating, prompting a fierce backlash and a probe by the country’s Financial Markets Authority.

France currently enjoys top marks from all three major credit rating agencies but has been under pressure amid the eurozone debt crisis and concerns over its finances