New York: As the Congress failed to make a headway in breaking the impasse over raising the country's debt ceiling before the deadline of October 17, a gloomy picture of default loomed over the horizon of US history,
Less than 50 hours were left before the US has any money to pay its bill.
The US Treasury Secretary has said that US authorities have not raised the federal debt ceiling in a timely manner before the deadline thus Fitch has ‘AAA' credit rating of the US on rating watch negative (RWN), and delays of lifting the debt ceiling would cause volatility and damage US creditworthiness.
Fitch believes that the debt ceiling will be raised soon, but the political brinkmanship and reduced financing flexibility could increase the risk of a US default.
Despite the negative watch, Fitch confirmed the ‘AAA' on US credit rating based on the country's strong economic and credit fundamentals, including its highly productive and diversified economy, extraordinary monetary and exchange rate flexibility, and the exceptional financing flexibility afforded by the global reserve currency status of the US dollar.
The last downgrade took place in August of 2011 when Standard & Poor's, another major rating agency, lowered US credit rating to AA+ as the country experienced a fiscal standstill. Currently Moody's rates the US as Aaa with a stable outlook.