Fitch Unimpressed By Debt Deal, GDP; Markets Unimpressed By Fitch


S&P has made it so enticing to get involved in U.S. debt politics that the other agencies are jumping on the bandwagon. And Washington can't win: while S&P continues to talk a big game about downgrading the U.S. for not cutting enough spending, Fitch is pinning its ratings outlook to GDP growth, which someeconomists will tell you is not going to come by cutting government spending in a recession.

Fitch Ratings does not rule out slapping a negative outlook on the U.S. AAA rating when it concludes a review of the country later this month, the agency's top analyst for the United States said on Tuesday. ...

"The downward revisions of the GDP were bigger than we expected and a source of concern," Riley said. "There could be a rating action which could include a revision of the outlook. I certainly couldn't rule that out."

So the agencies think that today's debt deal either cuts too little spending or too much. Or probably both. Surely that will be terrible for Treasuries.

U.S. rating at risk of negative outlook [Reuters]

Also: Moody's confirms U.S. rating at AAA, outlook negative [Reuters]