Fitch Ratings Skepticism on U.S. Debt Ceiling Resolution

Fitch Ratings on Tuesday expressed skepticism regarding a prompt resolution to the U.S. debt ceiling debate, even with a unified government under President-elect Donald Trump.

The agency pointed to the narrow Republican majority in the House and ongoing disagreements within the party over spending policies as significant hurdles.

Fitch noted that important fiscal policy decisions expected in 2025, which include suspending or increasing the debt limit, might not be implemented swiftly.

The ratings agency highlighted long-standing weaknesses in the federal government’s budgeting process contributing to anticipated delays.

Fitch underscored the fiscal challenges facing the U.S. While reaching an agreement on the debt ceiling and other fiscal matters, such as the extension of the 2017 tax cuts set to expire, is expected, the path to these decisions may be complicated and gradual.

Fitch had previously downgraded the U.S. government’s credit profile in 2023 following a debt-ceiling crisis.

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