Fitch affirms the ranking U.S. AAA

Fitch Ratings, one of the best known rating agencies in the world, has confirmed the AAA rating for the United States, saying that the outlook is stable, citing the role that the nation has the global financial system. Standard & Poor's, however, on Aug. 5 had cut the credit rating of the United States, from AAA to AA +, citing the fact that legislators have failed to cut spending in an important enough to reduce the record deficits.

Since S & P has downgraded the U.S., the yield on the 10-year benchmark for everything from mortgages to auto loans, fell to its lowest ever, 2.03 percent, up from of 3.77 percent reached this year.

According to Fitch, however, the United States could be assigned a negative outlook, indicating more than 50 percent chance the nation will be downgraded in the next two years. In order for this to happen, though, you should have a weak economic growth, or there should be the failure of Congress to launch the plan in denominations of 1,200 billion U.S. dollars of which the Congress itself had already granted.

U.S. government debt is outstanding, rose to 9.4 trillion dollars from 4.34 trillion dollars in mid 2007, when the government borrowed money to save the banking system and bring the economy out of recession. The United States has gone from having the average budget surplus of 139.7 billion dollars, from 1998 to 2001, to a deficit of 1,290 billion dollars last year, according to figures that were shown.

Fitch also expects that public ownership of federal debt will stabilize at 85 percent of gross domestic product and gross public debt will be by 105 percent, more than any other country that has a AAA ranking.

Posted in: Economy,Forex