Fitch: U.S. an 'unparalleled' triple-A nation

Fitch Ratings has reaffirmed that the United States’ credit reputation is among the best in the world, citing its growing economy and deep financial markets.

The credit rater reaffirmed its ‘AAA’ rating for the U.S. debt Monday, and gave the country gleaming reviews on its overall economic and financial health. However, it did note that there are some fiscal challenges in the future, as the two parties remain far apart on how to further address the nation’s finances.

But overall, the U.S. stands above nearly any other nation when it comes to sovereign debt, as Fitch hailed the country’s “unparalleled financing flexibility” and the ‘deepest and most liquid capital markets.”

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“The economy is one of the most productive, dynamic and technologically advanced in the world, underpinned by strong institutions and a favourable business climate,” the rater wrote.

Fitch noted that the deficit has fallen in recent years, but is on pace to begin climbing again as a share of the economy by 2018 if policymakers fail to either increase taxes or cut into entitlement programs. While policymakers did take some steps to rein in the deficit in recent years, any further progress will have to overcome fierce partisan battle lines, the rater said.

The rater also noted that the debt ceiling could soon become an issue for the country, with the borrowing cap taking effect again on March 16, and likely needing a boost sometime this fall. The rater said it expects policymakers will agree to an increase before risking default, although it could come close due to political haggling.

But when compared to other nations across the globe, the United States looks relatively strong. Its economy is growing faster and has a rosier outlook for the years ahead than many other countries in the developed world, Fitch said.

The rater added that it expects the Federal Reserve will raise interest rates for the first time since the financial crisis sometime in the fall of 2015. While a tightening of monetary policy has been unheard of for nearly a decade, Fitch said the U.S. economy appears well-positioned to weather the gradual tightening that is on the way.