Fitch Decides! The U.S. AA+ Rating is Stable, But Are There Hidden Financial Risks?

Global Financial Attention is Focused! According to ChainCatcher, Fitch has made a significant announcement, confirming the U.S. rating as 'AA+', with a stable outlook. This decision is like a boulder thrown into a lake, instantly creating ripples and sparking widespread discussion in the market.

Fitch recognized many advantages of the U.S. economy: its large economic scale, high per capita income, vibrant business environment, and the unique financing flexibility of the dollar—these are all the reasons behind the U.S. rating. However, there are two sides to every coin; the U.S.'s high fiscal deficit, heavy interest burden, and rising government debt act like three mountains, severely limiting the potential for further rating upgrades. More critically, the U.S. has yet to take any real action to address issues related to fiscal deficits, debt burdens, and the rising costs associated with an aging population.

Regarding fiscal deficit forecasts, Fitch predicts that the government's deficit as a percentage of GDP will decrease from 7.7% in 2024 to 6.9% in 2025. However, this positive trend will not last long, as it is expected to rise again to 7.8% in 2026 and further climb to 7.9% in 2027, indicating a bleak fiscal outlook.

Upon the release of this news, the market quickly reacted. After opening, the U.S. stock market experienced volatility, with investors beginning to reassess their asset allocation. The bond market also stirred, with fluctuations in U.S. Treasury yields, testing investors' confidence in U.S. government bonds. Other participants in the international financial market, whether central banks or large financial institutions, are closely monitoring this rating outcome to evaluate its potential impact on the global economy and financial system.

The confirmation of the U.S. rating may seem like a settled matter, but it has buried many uncertainties for the global economy. As a key engine of the global economy, any disturbance in the U.S.'s fiscal situation could trigger a chain reaction in the global economy. Will the U.S. be able to improve its fiscal situation and resolve the debt crisis? Global investors are holding their breath, closely watching the direction of U.S. fiscal policy.