Sequester Won’t Spur U.S. AAA Rating Downgrade, Fitch Says

Lock
This article is for subscribers only.

While triggering the U.S. spending cuts known as the sequester and a government shutdown won’t prompt a ratings downgrade, those outcomes “erode confidence” of achieving deficit reduction needed to sustain the nation’s top credit grade, according to Fitch Ratings.

If Congress doesn’t act before the March 1 deadline, federal spending will be reduced by $85 billion in the final seven months of the fiscal year ending Sept. 30 and by $1.2 trillion over the next nine years. Legislation passed last year, known as a continuing resolution, funds the government through March 27. Fitch has had a negative outlook on the U.S.’s AAA ranking since 2011.