Fitch: If the United States defaults, the rating will be lowered to AA-

May 25th, Fitch has put the US “AAA” long-term foreign-currency issuer default rating (IDR) on the negative watch list, due to the deadline for raising the debt ceiling (June 1), and they believe that the US governance is Weaker than other AAA rated countries. While the ratings agency sees the chance of default as “very low”, if it did, it would downgrade the U.S. to AA- (in line with Ireland and South Korea). Fitch forecasts the U.S. deficit to be 6.5% of GDP in 2023, widening to 6.9% by 2024. They noted that U.S. public finances were “slightly weaker than expected.” The U.S. remains on track to reach a deal by the end of the month, and while brinkmanship in debt ceiling talks is not uncommon, it does raise the stakes.