Ratings agency Fitch affirmed the United States’ sovereign debt rating at “AAA” on Tuesday, citing the strength of the country’s per capita income and the size of the economy.
The agency also maintained its outlook at “negative” and said it considered U.S. debt tolerance to be higher than that of other “AAA” sovereigns.
According to the agency, the US sovereign rating is supported by structural forces including the size of the economy, high per capita income and a dynamic business environment.
“The US benefits from the issuance of the US dollar, the world’s foremost reserve currency, and the exceptional financing flexibility associated with it, which has been highlighted once again by developments after March 2020. Fitch considers debt tolerance higher than other AAA-rated sovereign countries,” the ruling said.
Furthermore, according to the agency, the negative outlook on credit ratings reflects ongoing risks to public finances and the trajectory of the country’s debt, despite improvements in Fitch’s fiscal and debt projections since the last review.
“The dynamics currently point to a broad stabilization of the debt ratio at a level where a more significant increase could lead to a fall. However, key variables, including real interest rates and the fiscal deficit, may not be getting in the way. Expected, negative Creating side risk. In light of developments following the past review and future risks, a decline in governance poses additional risks to the ratings,” Fitch says.
This article originally appeared on Yahoo! Finance.
