Fitch affirms United States' ratings at 'AA ', outlook ‘stable’, despite projected slowdown in 2024
Fitch, a credit rating agency, expects the US government deficit to improve slightly in 2024, narrowing to 8 per cent of GDP from 8.8 per cent in 2023. This forecast is based on anticipated factors including rising government revenue, reduced spending compared to 2023, and the absence of a repeat of the large one-off spending on deposit insurance seen in 2023. "The interest burden, however, will continue to grow given the higher debt burden and impact of higher rates," Fitch added.
According to the agency, the outcome of the upcoming November presidential and congressional elections will be important for policymaking and the ability to pass and implement legislation. In November, peer Moody's lowered the outlook on the country's credit rating to "negative", citing large fiscal deficits and a decline in debt affordability. Meanwhile, Fitch Ratings also downgraded New York Community Bancorp and its bank subsidiary Flagstar Bank to 'BB '/'B' from 'BBB-'/'F3'.
Building on a previous downgrade in February, Fitch Ratings further adjusted New York Community Bancorp's (NYCB) credit rating in early March. This recent downgrade reflects a reassessment of NYCB's risk profile following the company's revelation of a critical weakness in internal loan review controls. Fitch also assigned a negative outlook, indicating a potential for further downgrades.
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