Fitch Ratings on Tuesday, citing the exceptional creditworthiness of the U.S., reaffirmed its highest AAA credit rating for U.S. debt.
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Fitch, one of the big three ratings firms along with Standard & Poors and Moodys Investors Service, said the U.S. would maintain its coveted AAA rating because of the ability of its broad and diverse economy to withstand economic shocks.
The affirmation of the US 'AAA' sovereign rating reflects the fact that the key pillars of US's exceptional creditworthiness remains intact; its pivotal role in the global financial system and the flexible, diversified and wealthy economy that provides its revenue base, Fitch said in a statement.
Monetary and exchange rate flexibility further enhances the capacity of the economy to absorb and adjust to 'shocks'.
The announcement may have helped stem a broader selloff on Wall Street. The Dow Jones Industrial Average, down more than 100 points in early trading, recovered much of its losses by mid-day.
In any case, Fitch warned that its outlook could change if the U.S. economy continues to falter and politicians continue to dither over U.S. debt problems.
Treasury Department spokeman Anthony Coley issued this statement: The Treasury Department continues to believe that Treasury securities are AAA investments. Today's report underscores the importance of Congress taking additional actions to address our long-term fiscal challenges.
On Aug. 5 S&P cut the U.S. rating to a notch below AAA, following through on earlier threats to downgrade U.S. debt if fiscal leaders failed to address this countrys growing budget deficit.
The move sent global markets reeling, with U.S. stock markets gyrating up and down all last week.
Fitchs move Tuesday should provide some level of comfort to a vast swath of mutual fund managers and various bond holders and investors who are required to invest their clients money in nothing but top rated debt.
Fears that institutional investors with AAA requirements would have to sell downgraded U.S. debt prompted concerns of broad selloffs of all manner of securities connected in one way or another to the U.S. government.
Moodys reaffirmed the U.S.s top Aaa ranking on Aug. 8, citing the U.S.s status as printer of the worlds reserve currency.