Fitch raises United States’ outlook to ‘stable’ from ‘negative’

July 8 (Reuters) – Global ratings agency Fitch on Friday raised United States’ outlook to “stable” from “negative” on improved near-term government debt dynamics, driven by a stronger-than-expected post-pandemic economic recovery.

The agency said it expects government revenue to grow this year, helped by strong personal and corporate income taxes.

Fitch maintained its sovereign rating at ‘AAA’ on structural strengths such as the size of the economy, high per capita income, and a dynamic business environment.

Last month, Moody’s also affirmed its highest sovereign rating of “Aaa” for the country. The ratings agency said it expects the economy to remain resilient to current challenges from high inflation and Russia’s invasion of Ukraine.

The US economy has been on recession watch as the Federal Reserve aggressively tightens monetary policy to tackle inflation.

The US central bank last month raised its policy rate by three-quarters of a percentage point, its biggest hike since 1994.

(Reporting by Bhanvi Satija in Bengaluru; Editing by Devika Syamnath)