From the MONEY NEWS:
…Fitch’s outlook on the U.S., which it still assigns its top AAA grade, reflects declining confidence that timely fiscal measures necessary to place U.S. public finances on a sustainable path will be forthcoming, the company said in a statement Monday. Standard & Poor’s and Moody’s Investors Service said Nov. 21 that the so-called supercommittee’s inability to reach an agreement didn’t merit a downgrade because the inaction will trigger $1.2 trillion in automatic spending cuts.
U.S. government debt rallied the most since the end of 2008 after Standard & Poor’s stripped the U.S. of its AAA ranking on Aug. 5, while global equities lost $9.7 trillion in market value during that period. Even with lawmakers reluctant to embrace the automatic cutbacks that helped prevent downgrades, President Barack Obama has pledged to veto any efforts to undermine the spending reductions.
“In terms of additional information, a Fitch negative outlook doesn’t seem that significant,” Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, said before the announcement. “A negative outlook from Fitch just adds one more voice to the chorus of a slowly deteriorating U.S. fiscal situation.”
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