Why fitch still rates the us aaa

Yemen rebels claim to intercept US-made spy drone in Marib. EU worried about Russian movements at Ukraine border. Trump aide Stephen Bannon indicted for contempt of Congress. Biden, Xi virtual meeting set for Monday, White House confirms. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Investors use the company's ratings as a guide as to which investments will not default and subsequently yield a solid return.

Fitch bases the ratings on factors, such as what kind of debt a company holds and how sensitive it is to systemic changes like interest rates. The Fitch rating system is as follows:. Investment grade. Non-investment grade. Sovereign credit ratings are available to investors to help give them insight into the level of risk associated with investing in a particular country.

Countries will invite Fitch and other credit rating agencies to evaluate their economic and political environments and financial situations to determine a representative rating. On the lower end was Brazil with a BB-. For example, those with credit scores below are generally considered to be subprime borrowers , for which lending institutions often charge higher interest than they would for a conventional mortgage. And credit quality is just one factor that investors consider when deciding how risky a bond is.

They also reckon with liquidity, which is the ease of buying and selling a security. On this measure, the US Treasury is still No.

If the government dishes out wisely to reduce scarring in the labor market, prevent social and political unrest, and to set up the economy for a faster rebound, then it could be money well spent, eventually enhancing its credit credentials. By providing your email, you agree to the Quartz Privacy Policy. Skip to navigation Skip to content. Read More. The Treasury Department has warned it will run out of cash and exhaust extraordinary measures by October Fitch suggested that getting near that date could trigger a downgrade.

Fitch reiterated that the United States would likely get downgraded even if it kept paying bondholders, but delayed other payments like Social Security and paychecks to federal workers. US government will run out of money by October 18, Treasury secretary says. Fitch has had a negative outlook on the United States since July