Fitch maintains negative watch on US credit rating despite debt limit resolution

Fitch Ratings will keep the US's "AAA" sovereign rating on its "negative watch" list despite Congress passing a bipartisan bill to raise the debt limit. The agency warned that "repeated political standoffs" over the debt ceiling and "last-minute suspensions" to prevent default "lowers confidence in governance on fiscal and debt matters." The deal could reduce projected deficits by about $1.5tn over the next decade, but Fitch said "failure to tackle fiscal challenges from growing mandatory spending has led to rising fiscal deficits and debt burden." The company plans to resolve the "Negative Watch" in 3Q23.