Moody's, Fitch keep U.S. rating triple-A

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WASHINGTON, Aug. 2 (UPI) -- The United States' credit rating remains top-notch but with an asterisk, two key credit rating firms said Tuesday.

While Moody's Investor Services and Fitch Ratings both said they will keep the country's credit rating at triple-A for now, the firms said a downgrade is still possible if the U.S. financial situation deteriorates or if promised federal spending cuts don't materialize, the Los Angeles Times reported.

Yet to weigh in is Standard & Poor's Financial Services, which was silent on the matter Tuesday, the Times said. The firm is considered the most likely to lower the U.S. rating.

The two credit ratings firms issued their assessments after President Barack Obama signed into law compromise legislation passed by Congress to raise the nation's debt limit and cut its budget deficit.

A major fear as the nation had teetered toward possible default on some of its financial obligations was that it would lead rating firms to lower the credit rating, which would result in higher interest rates for some loans.

"The fundamental economic and financial underpinning of the United States' AAA status remains strong despite the heated political debate over the role of government and how best to reduce the out-sized federal budget deficit," Fitch said.

The firm added "despite the intensity and theater of political discourse in the United States, there is the political will and capacity to ultimately do the right thing."

Moody's hinted at its concerns when it said the two-step, spending-cut process approved by Congress is "untested."

"Attempts at fiscal rules in the past have not always stood the test of time," Moody's said.