Fitch: "Political brinkmanship" raises US default risk
The ratings agency Fitch said Tuesday that it believes the US debt ceiling "will be raised soon" but warned that "political brinkmanship" could raise the risk of default in the United States, dpa reported.
Fitch, one of the leading Wall Street rating agencies, issued a negative watch on its AAA rating for US sovereign debt, with the Treasury Department's Thursday deadline looming with Congress yet to pass a debt ceiling increased.
In the days that follow, potential delays in payments to government suppliers, workers and pensioners "would damage the perception of US sovereign creditworthiness," Fitch said in a statement on its website.
"The prolonged negotiations over raising the debt ceiling, following the episode in August 2011, risks undermining confidence in the role of the US dollar as the preeminent global reserve currency, by casting doubt over the full faith and credit of the US," Fitch said. "This 'faith' is a key reason why the US AAA rating can tolerate a substantially higher level of public debt than other AAA sovereigns."