The U.S.’s AAA credit grade was placed on rating watch negative by Fitch Ratings, which cited the government’s failure to raise its borrowing limit as the Treasury’s deadline nears.
“The political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default,” Fitch, which is a jointly owned subsidiary of Paris-based Fimalac SA and New York-based Hearst Corp., said today in a statement. Fitch reiterated that it expects the debt ceiling to be raised.
Treasury Secretary Jacob J. Lew has told Congress the extraordinary measures being used to avoid breaching the debt ceiling “will be exhausted no later than Oct. 17” and the department will have about $30 billion to pay obligations. Fitch said it expects to resolve its rating watch negative outlook on the U.S. by the first quarter of 2014.
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