Fitch puts U.S. rating on negative watch, citing gridlock

Oct. 15, 2013 at 6:29 PM
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NEW YORK, Oct. 15 (UPI) -- Fitch Ratings, one of three major credit assessors, put the nearly perfect U.S. AAA rating on negative status Tuesday, citing a gridlocked government.

Technically, Fitch kept the credit rating at AAA but noted it was on a "rating watch negative" status, which means it would be reassessed soon due to financial concerns.

"Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default," the rating agency said.

CNBC reported Tuesday Fitch evoked a response from the Treasury Department, where a spokesperson said the firm underscored the need for Congress to raise the debt ceiling soon.

House leaders Tuesday said they would come up with a plan of their own on time for a vote, after setting aside a Senate proposal.

Senate Majority Leader Harry Reid, D-Nev., warned the House the AAA credit score could be reduced by Tuesday night.

Fitch and Moody's Investors Service have both kept the U.S. at AAA, but the third major credit rating firm, Standard & Poor's, dropped the U.S. government to AA plus in August 2011 just after lawmakers raised the debt ceiling just after the deadline had passed but before the Treasury actually defaulted on any payments.

S&P at the time cited political brinkmanship as a contributing factor to the ratings drop.

In June, S&P moved the U.S. rating from AA plus with a negative status to AA plus with a stable status, which implies the firm believed the U.S. financial situation was on more solid ground.

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