Posted by: youngragingbull | January 28, 2013

Short-term debt risks to U.S. AAA-rating fade: Fitch

The temporary suspension of the U.S. federal government’s debt limit removes the near-term risk to the country’s AAA rating, Fitch Ratings said Monday.

The ratings firm previously warned that failure to increase the debt limit in a timely manner would prompt a review of the sovereign rating.

“Without the distraction of a near-term funding crisis for the federal government, Congress and the administration have the space to focus on the substantive fiscal policy choices necessary to place public finances on a sustainable path over the medium to long-term,” Fitch said, in a news release.

Fitch said an agreement on a credible medium-term deficit-reduction plan consistent with sustaining the economic recovery would likely result in an affirmation of the AAA rating and a revision of the rating outlook to stable from negative.

Without such a plan, “the negative outlook would likely be resolved with a downgrade later in 2013,” Fitch said.

Source: MW

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