Fitch Maintains US Sovereign Credit Rating on 'Negative Watch'

International credit rating agency Fitch has maintained the United States' sovereign credit rating (AAA) on a 'negative watch.'

Major foreign media outlets, including Bloomberg News, reported on the 2nd (local time) that Fitch decided to keep the U.S. sovereign credit rating on a negative watch.

U.S. President Joe Biden held a press conference at the White House in Washington, D.C., on the 31st of last month (local time) regarding the debt ceiling agreement. [Image source=Yonhap News]

A negative watch status indicates the possibility of a future downgrade. Fitch made this decision while positively evaluating the U.S. House and Senate's handling of the debt ceiling agreement to avoid a federal government default.

Fitch stated, "The repeated political deadlock surrounding the debt ceiling and delays until just before the expected default date undermine confidence in governance related to fiscal and debt issues," adding, "We considered the continuous deterioration of governance over the past 15 years, increasing political polarization, and brinkmanship tactics surrounding the debt ceiling increase."

Earlier, on the 24th of last month, Fitch placed the U.S. credit rating on a negative watch due to 'political partisanship' obstructing problem resolution despite the approaching expected default date.