NEW YORK, Oct. 15 (Xinhua) -- Fitch Ratings on Tuesday placed the 'AAA' credit rating of the United States on rating watch negative (RWN), saying that delays of lifting the debt ceiling would cause volatility and damage U.S. creditworthiness.
The U.S. Treasury Secretary has said extraordinary measures will be exhausted by Oct. 17, but the U.S. authorities have not raised the federal debt ceiling in a timely manner before the deadline, said the rating agency in a statement.
Fitch stated that failure by the U.S. government to honor interest and/or principal payments on the due date of U.S. Treasury securities would lead Fitch to downgrade the U.S. sovereign credit rating to 'restricted default' until the default event was cured.
Although the Treasury would still have limited capacity to make payments after Oct. 17, it would be exposed to volatile revenue and expenditure flows, Fitch added.
Moreover, the delays of payments to suppliers and employees, as well as social security payments to citizens, would damage the perception of U.S. sovereign creditworthiness and the economy.
According to the statement, it expects to resolve the RWN by the end of the first quarter of 2014 at the latest. The outlook on the long-term ratings was previously negative.
However, Fitch believes that the debt ceiling will be raised soon, but the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default.
Despite the negative watch, Fitch confirmed the 'AAA' on U.S. credit rating based on the country's strong economic and credit fundamentals, including its highly productive and diversified economy; extraordinary monetary and exchange rate flexibility; and the exceptional financing flexibility afforded by the global reserve currency status of the U.S. dollar.
The last downgrade took place in August of 2011 when Standard & Poor's, another major rating agency, lowered U.S. credit rating to AA+ as the country experienced a fiscal standstill. Currently Moody's rates the U.S. as Aaa with a stable outlook.
WASHINGTON, Oct. 15 (Xinhua) -- U.S. President Barack Obama plans to meet with Democratic leaders in the House of Representatives on Tuesday afternoon, the White House said.
House Minority Leader Nancy Pelosi and other House Democratic leaders are expected to attend the meeting scheduled for 3:15 p.m. ET (1915 GMT) in the Oval Office, the White House said in a statement. Full story
WASHINGTON, Oct. 14 (Xinhua) -- Lawmakers in U.S. Senate intensified their talks on Monday searching for a deal to raise the debt ceiling and reopen the federal government, but the planned meeting between U.S. President Barack Obama and congressional leaders was postponed.
The White House announced at noon that Obama will meet with congressional leaders at the White House on Monday afternoon. Vice President Joe Biden, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, House Speaker John Boehner and House Minority Leader Nancy Pelosi are all expected to attend. Full story