The Ottumwa Courier

AP National

October 17, 2013

Fitch puts US credit rating on negative watch

WASHINGTON (AP) — The Fitch credit rating agency has warned that it is reviewing the U.S. government's AAA credit rating for a possible downgrade, citing the impasse in Washington that has raised the threat of a default on the nation's debt.

Fitch placed the U.S. credit rating on negative watch Tuesday, a step that would precede an actual downgrade. The agency said it expects to conclude its review within six months.

The announcement comes as House and Senate leaders face a Thursday deadline to raise the nation's $16.7 trillion borrowing limit. Fitch says it expects the debt limit to be raised soon. But it adds, "the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default."

A Treasury Department spokesman said the announcement "reflects the urgency with which Congress should act to remove the threat of default hanging over the economy."

Fitch is one of the three leading U.S. credit ratings agencies, along with Standard & Poor's and Moody's Investors Service. S&P downgraded U.S. long-term debt to "AA+" in August 2011.

Fitch said that the Treasury might not be able to prioritize its interest payments on U.S. debt to avoid a default. "It is unclear whether it even has the legal authority to do so," Fitch said.

Many economists expect Treasury to prioritize its payments to stave off default. And Moody's Investors Service said in an Oct. 7 report that Treasury would continue to make interest payments after the Thursday deadline.

A credit rating is an assessment of how able a country or company is to repay the money it's borrowed. A AAA rating lets companies and governments borrow at super-low rates.

So far, most investors have remained confident in U.S. debt. Rates have risen on short-term Treasurys but not on longer-term debt, like the benchmark 10-year Treasury note. That shows that investors are continuing to buy that debt. The rate on the 10-year note is important because it affects rates on mortgages and many other loans.

Text Only
AP National
  • Obama voices skepticism on Russia in Ukraine WASHINGTON (AP) — President Barack Obama conveyed skepticism Thursday about Russian promises to de-escalate a volatile situation in Ukraine, and said the United State and its allies are ready to impose fresh sanctions if Moscow doesn't make good on i

    April 18, 2014

  • Late sign-ups improve outlook for Obama health law WASHINGTON (AP) — A surge of eleventh-hour enrollments has improved the outlook for President Barack Obama's health care law, with more people signing up overall and a much-needed spark of interest among young adults. Nonetheless, Obama's announcemen

    April 18, 2014

  • Cyber cops: Target hackers may take years to find WASHINGTON (AP) — Secret Service investigators say they are close to gaining a full understanding of the methods hackers used to breach Target's computer systems last December. But the agency says it could take years to identify the criminals who sto

    April 18, 2014

  • 10 Things to Know for Today Your daily look at late-breaking news, upcoming events and the stories that will be talked about today: 1. UKRAINIAN MILITIA DENIES CALLS TO FREE BUILDINGS Pro-Russian insurgents in the east who have been occupying government buildings say they will

    April 18, 2014

  • White House updating online privacy policy WASHINGTON (AP) — A new Obama administration privacy policy released Friday explains how the government will gather the user data of online visitors to WhiteHouse.gov, mobile apps and social media sites, and it clarifies that online comments, whether

    April 18, 2014

  • A year after background check defeat, modest goals WASHINGTON (AP) — Democratic worries about this November's elections, a lack of Senate votes and House opposition are forcing congressional gun-control supporters to significantly winnow their 2014 agenda, a year after lawmakers scuttled President Ba

    April 16, 2014

  • Court to weigh challenge to ban on campaign lies WASHINGTON (AP) — Negative campaigning and mudslinging may be a fact of life in American politics, but can false accusations made in the heat of an election be punished as a crime? That debate makes its way to the Supreme Court next week as the justi

    April 16, 2014

  • College Board provides a glimpse of new SAT WASHINGTON (AP) — Anxious students — not to mention their parents — can get a heads-up for how the redesigned SAT might look in two years. Sample questions for the new version of the college-entrance test were released on Wednesday by the College Boa

    April 16, 2014

  • End of NYPD Muslim surveillance program applauded NEW YORK (AP) — Muslim groups and civil liberties advocates applauded the decision by New York Police Department officials to disband a controversial unit that tracked the daily lives of Muslims as part of efforts to detect terrorism threats, but the

    April 16, 2014

  • 10 Things to Know for Today Your daily look at late-breaking news, upcoming events and the stories that will be talked about today: 1. NEARLY 300 PEOPLE ARE MISSING AFTER KOREAN BOAT SINKS The accident involving a ferry that was headed to a tourist island killed three passenger

    April 16, 2014

Obituaries
Record
Facebook
AP National