Fitch may lower outlook on US credit after super committee failure
The congressional super committee's failure to reach a deal on $1.5 trillion in federal deficit cuts over the next decade could trigger a revision of the U.S. sovereign debt rating by Fitch Ratings.
The ratings agency will finalize its review of the nation's sovereign debt rating by the end of November. Fitch previously indicated that a failure to reach an agreement would lead to a negative ratings action.
Fitch said it most likely will change the debt rating's outlook to negative — a move that signals a downgrade is at least 50% more likely over the course of the next two years.
Moody's Investors Service and Standard & Poor's told Bloomberg news there is no need to lower the nation's sovereign debt rating in light of the committee's failure to reach a consensus.
S&P, which lowered its rating on America's debt rating over the summer, said a built-in safeguard that requires automatic spending cuts in the amount of $1.2 trillion prevents the need further downgrades.
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