Fitch affirms US at AA+ with stable outlook, flags fiscal and inflation risks

Fitch Ratings on Thursday affirmed the United States' sovereign credit rating at "AA+" with a stable outlook, citing the country's large and diversified economy, high per-capita income and the U.S. dollar's status as the world's leading reserve currency, Reuters reported.

According to Reuters, Fitch said the U.S. economy had remained resilient despite higher tariffs, government spending cuts, tighter border controls and increased policy uncertainty. The agency said the economy's ability to absorb shocks and its flexibility continued to support its credit profile.

Fitch expects U.S. economic growth to slow to 1.9% in 2026 and 2027 from 2.8% in 2025. The agency also pointed to weakening labour demand and a significant slowdown in job creation this year.


Inflation remains a key concern. Fitch expects consumer price inflation to average 3.4% in 2026, well above the Federal Reserve's 2% target. Reuters reported that the agency expects tariffs to continue adding to core goods inflation, although their impact so far has been less severe than initially anticipated.

The fiscal outlook also remains a major weakness for the U.S. credit profile. Fitch forecasts the general government deficit will widen to 7.4% of GDP in 2026 and remain at that level in 2027, which would be the highest deficit among sovereigns rated in the "AA" category.

Higher military spending and interest costs, along with rising spending on Medicare and Social Security, are expected to constrain efforts to reduce the deficit, Reuters reported.

Fitch's decision follows S&P Global's move in June to maintain its "AA+" rating on the United States, citing the resilience of the economy and strength of its institutions.

Fitch downgraded the U.S. sovereign rating by one notch from the top-tier "AAA" level in 2023, citing an expected deterioration in public finances and repeated confrontations over raising the federal debt ceiling.

Moody's also cut the U.S. rating by one notch last year, citing rising government debt and removing the country's last remaining triple-A sovereign rating.

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