Fitch Ratings affirmed the United States' long-term sovereign credit rating at AA+ with a stable outlook, while cutting its growth forecast and flagging a widening fiscal gap. The agency now expects the deficit and debt load to keep climbing even as it sees no near-term downgrade risk.
Fitch Ratings affirmed the United States' long-term sovereign credit rating at AA+ on Thursday, keeping a stable outlook even as it flagged a slowing economy and mounting fiscal strain. The agency now expects US growth to moderate to 1.9% in both 2026 and 2027, down from 2.8% in 2025.
A cooling labor market, a patient inflation call
Fitch pointed to a clear cooling in the labor market as a key driver of the slowdown, noting that labor demand has weakened and job creation has dropped significantly this year. On prices, the agency expects inflation to average 3.4% in 2026, above the 2.9% median forecast for AA-rated countries. It also projects that inflation will not reach the Fed's target until the end of 2028.
Despite the softer outlook, Fitch said the rating remains underpinned by the scale of the US economy, high per-capita income, a dynamic business environment and what it called exceptional financing flexibility — a reference to the dollar's reserve-currency status. The dollar holds a 58% share of global reserves and accounts for 89% of over-the-counter operations, according to Investing.com.
Deficit, debt and the shutdown risk
Fitch forecasts the general government deficit will widen to 7.4% of GDP in 2026 from 6.8% in 2025, staying there in 2027 — the highest in the AA category. General government debt-to-GDP is expected to rise to 123% by the end of 2028 from 117% at the end of 2025, more than double the AA median of 46.3%.
Longer term, Fitch highlighted the growing burden of entitlement spending, projecting that Medicare and Social Security costs will expand by nearly one percentage point of GDP by 2032 as the population ages. The agency also warned that government shutdowns may become more likely and more protracted, a risk that has repeatedly rattled markets as funding deadlines come and go without resolution.
Taken together, high deficits, a substantial interest burden and rising debt levels continue to constrain the rating, even though Fitch stopped short of signaling any near-term downgrade risk. The affirmation effectively restates the assessment Fitch first reached in 2023, when it stripped the United States of its AAA rating over the same structural concerns around fiscal governance and debt-ceiling brinkmanship.
Sources: Investinglive, Investing.com
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