Fitch revises outlook on US to negative from stable
Fitch Ratings affirmed several U.S. credit ratings at AAA on Monday, while also revising the nation's overall long-term outlook to negative from stable. The revised outlook reflects Fitch's declining confidence in the ability of U.S. policy makers to put public finances on a sustainable path to secure a AAA sovereign debt rating over the long haul. This lack of confidence is tied back to the Congressional Joint Select Committee on Deficit Reduction's recent failure to obtain a deal that could cut the federal deficit by $1.5 trillion over the course of a decade. Still, Fitch affirmed the country's long-term foreign, local currency issuer default ratings and U.S. Treasury security ratings at AAA on Monday. The affirmation "reflects still strong economic and credit fundamentals," Fitch said. The dollar and Treasury securities remain global benchmarks, the ratings giant reported. "The U.S. dollar's status as the pre-eminent global reserve currency and depth of the U.S. Treasury market render financing risks minimal and underpin a low cost of fiscal funding," Fitch concluded. Still, Fitch said the nation's economy is the most productive in the world, and the ratings firm expects the economic recovery to regain momentum in the second half of 2012. But the firm said it "recognizes that there is considerable uncertainty surrounding the economy's potential output and scope for a period of above trend economic growth. The longer productive capacity remains idle and unemployment high, the greater the likelihood that the loss of output (and tax receipts) is greater than currently estimated, with negative implications for the medium to long-term fiscal outlook." Write to Kerri Panchuk.