Credit rating agency Fitch said Wednesday it expects US fiscal deficits to remain high this year, and that fiscal policy and governance implications of the presidential elections will be key issues for the country’s sovereign rating.
Fitch last year downgraded the US government’s top credit rating to AA+ from AAA, citing fiscal deterioration and repeated down-the-wire debt ceiling negotiations.
A major near-term shift to deficit reduction measures is unlikely because of political polarization, said Shelly Shetty, head of Americas Sovereign Ratings at Fitch Ratings, in a webinar on Wednesday.
The US debt rating would be hurt by a “marked increase” in general government debt, and a decline in coherence and credibility of policymaking that undermines the US dollar’s reserve currency status, she added.
Fitch’s downgrade in August, two months after the debt ceiling crisis was…
