Fitch’s US credit rating remains on negative watch

The US AAA credit rating is still on negative watch, even after the debt limit agreement, Fitch Ratings announced on Friday.

“Reaching an agreement despite heated political partisanship while reducing fiscal deficits modestly over the next two years are positive considerations,” Fitch said in a statement.

A steady deterioration in governance during the previous 15 years, heightened political polarisation, repeated brinkmanship about lifting the government’s borrowing ceiling, and increasing fiscal deficits and debt, the agency added.

Fitch had warned last week that there might be a credit downgrade for the U.S. and is expected to resolve the review in the third quarter of this year.

Following months of arguing between Democrats and Republicans, the U.S. Senate approved bipartisan legislation endorsed by US President, Joe Biden on Thursday that raises the government’s $31.4 trillion debt ceiling.