Barron’s (January 3)
“Of all the fearless forecasts put out there for the new year, one conspicuously missing from those lists is probably the easiest one: The United States of America will lose its last remaining triple-A credit rating.” Standard & Poor’s was the first to lower its rating on U.S. government debt in 2011. In 2023, “Fitch Ratings followed suit.” That November, Moody’s Investors Service “lowered its outlook to negative.” It seems inevitable, especially given Trump’s desire for tax cuts, that Moody’s will eventually lower its Aaa rating as well. “Given the lack of serious measures, so far, to slow the government debt growth, the U.S.A. doesn’t merit a triple-A rating.”
Tags: 2011, 2023, Credit rating, Fearless, Fitch, Forecasts, Government debt, Inevitable, Lower, Merit, Moody's, Negative, Outlook, Rating, S&P, Tax cuts, Triple-A, Trump, U.S.
American Banker (August 2)
“Investors were in a sour mood Wednesday after Fitch Ratings downgraded the U.S. government’s credit rating, but analysts expect the firm’s action to have little long-term impact on banks. The markets didn’t exactly shrug off the downgrade…. But the main point made by Fitch’s action — that the U.S. political system is messier than it used to be — is one that analysts say has long been obvious to investors.”
Tags: Analysts, Banks, Credit rating, Downgraded, Fitch, Impact, Investors, Markets, Messier, Political system, Sour mood, U.S. Government
Insider (August 2)
“Fitch shocked the markets when it cut the US government’s credit score Tuesday at a time when the economy appears to be in a stable state.” The downgrade from AAA to AA+ has been widely criticized, “from top Biden administration officials to Wall Street,” with “market thinkers” labelling it “bizarre,” “puzzling,” “unwarranted,” “strange” “inept” and “ridiculous.”
Tags: AA+, AAA, Bizarre, Credit score, Criticized, Downgrade, Economy, Fitch, Inept, Markets, Puzzling, Shocked, Stable, Strange, U.S. Government, Unwarranted, Wall Street
South China Morning Post (April 2)
Banks and regulators in China have engaged in a delicate dance between reducing non-performing loans (NPLs) and maintaining profits. “That’s why the NPL ratios of the nation’s key banks all hover at about the same level–now around 1.7 per cent of loans,” though “Fitch estimates that the real ratio could be as high as 20 per cent, implying total NPLs of 19 trillion yuan (US$3 trillion).” But the regulator is now becoming more demanding in NPL reduction and unforgiving of gimmicks previously employed to hide NPLs. “Given Beijing’s focus on the stability of the financial system, the flow of NPLs into the market should pick up considerably in the next two to three years, providing ample opportunity for new investors.”
Tags: Banks, China, Fitch, Gimmicks, Investors, Market, NPLs, Opportunity, Profits, Regulators
Financial Times (June 30)
“The UK’s decision to leave the EU will not have any immediate, direct negative consequences for the ratings of states and major banks across Asia Pacific,” according to Fitch Ratings who also warned that “Japan could prove the exception…given the yen’s haven status and resultant strengthening posing a risk to policymakers’ planning.”
Tags: APAC, Banks, Brexit, Consequences, EU, Fitch, Haven Risk, Japan, Negative, Ratings, Sovereigns, UK, Yen
Financial Times (May 20)
“The plunge in yields on corporate and sovereign bonds in Europe and Asia — the value of bonds with a negative yield is nearly $10tn, according to Fitch — has sent investors racing into the US market.” This surging demand “has allowed companies to issue debt at lower yields, though US yields are still more attractive than in other parts of the world.”
Tags: Asia, Bonds, Corporate, Debt, Demand, Europe, Fitch, Investors, Negative yield, Plunge, Sovereign, U.S., Yields
Bloomberg (September 16)
Standard & Poors became the latest credit-rating company to downgrade Japan, following earlier moves by Moody’s and Fitch. “Could the Japan downgrade presage a stampede for the exits by international investors? Unlikely.” Most JGB investors are domestic “and probably won’t be concerned about the verdict of U.S. financial services companies, especially ones with the questionable reputations of the credit raters.” Japanese investors will continue to “view Japanese bonds as the ultimate safe zone.”
Tags: Credit rating, Downgrade, Fitch, Investors, Japan, JGBs, Moody's, Reputations Bonds, Safe, Standard & Poors, U.S.
Wall Street Journal (January 17)
Over the past 5 years, the EU has been suffering from “a kind of schizophrenia about the role that credit-rating agencies such as Moody’s, Standard & Poor’s and Fitch should play in the markets.” Some of the reforms have been hare-brained, like trying to silence downgrades, but the latest package is on target with a proposal to write the agencies out of EU law. “Denying ratings any sort of official status is the best reform for a business that has long dined out on the privileged position that regulators granted them. It should also really be the only reform you need.”
Tags: Credit-rating agencis, EU law, Fitch, Moody's, Official status, Regulators, S&P
The Independent (May 31)
A day of stunning developments in the European debt crisis is summed up simply. “Spaniards are moving money out of their nation’s banks faster than at any point since records began, as Fitch downgrades eight regions and ECB President Mario Draghi warns Europe’s leaders must clarify their vision for the euro.”A day of stunning developments in the European debt crisis is summed up as “Spaniards are moving money out of their nation’s banks faster than at any point since records began, as Fitch downgrades eight regions and ECB President Mario Draghi warns Europe’s leaders must clarify their vision for the euro.”
USA Today (August 7)
“The United States’ unquestioned AAA credit rating is gone, for the first time ever.” S&P’s downgrade was not a surprise, instead it “merely confirmed what anyone with their eyes open for the past decade or two already knew: The U.S. has a huge and growing debt problem that it is resolutely unwilling to solve.” USA Today points out one silver lining. The U.S. is not incapable of solving this problem, merely unwilling. Another silver lining is that two major agencies (Moody’s and Fitch) still assign the highest rating to U.S. debt, which continues to be highly sought by investors worldwide.
