However, the American rating agency is cautious about the short-term rating.
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The Fitch agency confirmed Thursday the “best possible” AAA rating for US debt despite the coronavirus pandemic, but is cautious about the short-term rating.
For now, she has attached this note to a stable outlook. But she notes that “the risk of a negative short-term assessment has increased given the magnitude of the shock to the economy and public finances of the coronavirus.”
Fitch further notes that fiscal measures have been taken “in the absence of a plan to … clean up public finances and public debt.”
The rating agency notes that the coronavirus has caused “an unprecedented shock” in the financial markets and economic activity. Against this backdrop, policymakers are working to avoid a more lasting recession.
Like other advanced countries, the United States has imposed draconian measures: population containment, suspension of air routes, closings of restaurants, schools, among others, to slow the spread of the disease, “which will lead to a contraction deep centered on the second quarter of 2020 and a massive increase in unemployment, “says Fitch.
But it takes as a reference scenario the lifting of containment measures in the second half of 2020 (2H20), allowing a resumption of growth.
However, great uncertainty surrounds economic forecasts, which is linked to the ability to quickly contain the virus.
Fitch reserves judgment for the next ratings, noting that it will depend on the degree of recovery in the economy.
She recalled that the previous crisis in 2008-2009 had been followed by a slowdown in the recovery and, above all, “the upward trajectory of debt has not been stopped and the deficits have increased”.
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