US Credit Rating at Risk of Fitch Cut on Debt-Limit Impasse

(Bloomberg) -- The tension around the US debt-limit negotiations ratcheted up after Fitch Ratings warned the nation’s AAA rating was under threat from a political standoff that’s preventing a deal. The DBRS Morningstar adjustment “reflects the risk of Congress failing to increase or suspend the debt ceiling in a timely manner,” the statement said. Benchmark 10-year Treasury yields hovered around their highest in more than two months on expectations that interest rates may continue to rise even as the debt ceiling issue drags on. Failure leading to a debt default would however lead Fitch to cut affected debt securities to a ‘D’ rating, with others downgraded to ‘CCC’ and ‘C’. Moody’s Investors Service, which has the US at a AAA rating with a stable outlook, hasn’t made any adjustments in wake of the wrangling in Washington to lift the nation’s borrowing capacity.