After months of debate over the debt ceiling, Fitch Ratings has issued a warning about U.S. debt, putting the country’s top-rated bonds on “Rating Watch Negative.”
“The Rating Watch Negative reflects increased political partisanship that is hindering reaching a resolution to raise or suspend the debt limit despite the fast-approaching x date,” Fitch wrote in a press release late Wednesday.
While Fitch said it “still expects a resolution to the debt limit before the x-date,” the firm said risks were rising that the country could begin to “miss payments on some of its obligations.”
In perhaps an optimistic sign for some investors, though, Fitch reiterated the strength of overall U.S. credit. “Fitch would expect the U.S. country ceiling to remain at ‘AAA’ even in the scenario of a debt default,” the firm wrote. “The U.S. dollar is the pre-eminent world’s reserve currency, and we view the risk of exchange and capital controls as de minimis.”
S&P 500 and Nasdaq Composite futures were trading higher late Wednesday, a move that’s at least partially tied to a strong earnings report and impressive outlook from
Nvidia
(ticker: NVDA). Shares of the chip maker soared 25% in after hours trading following the company’s results.
Write to Alex Eule at [email protected]
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