Fitch Affirms US 'AA+' Rating, Flags Fiscal and Inflation Pressures

Fitch Ratings has affirmed the United States' sovereign credit rating at 'AA+' with a stable outlook, acknowledging the economy's continued strength even as it faces mounting fiscal challenges.

The agency pointed to the size and flexibility of the US economy, high per-capita income, and the dollar's dominant role as the world's reserve currency as key supports for the rating. It noted that the economy has remained resilient despite higher tariffs, government spending cuts, tighter border controls, and elevated policy uncertainty.

However, Fitch's outlook is not without caution. The agency projects economic growth to slow to 1.9% in 2026-2027, down from an estimated 2.8% in 2025. It also flagged weakening labor demand and a notable slowdown in job creation this year.

Inflation is expected to average 3.4% in 2026, still well above the Federal Reserve's 2% target. While tariffs have contributed to higher core goods prices, their impact has been less severe than initially anticipated.

On the fiscal front, Fitch expects the general government deficit to widen to 7.4% of GDP in 2026 and remain at that level the following year—the highest among 'AA'-rated sovereigns. Rising military and interest costs, along with increased spending on Medicare and Social Security, are seen as limiting any meaningful deficit reduction.

The affirmation follows similar action by S&P Global, which maintained its 'AA+' rating on the US in June. Fitch had downgraded the US from its top-tier 'AAA' rating in 2023, citing fiscal deterioration and recurring debt ceiling standoffs. Moody's also stripped the US of its last triple-A rating last year, citing rising debt levels.