Fitch Ratings Downgrades US Industry Outlook Rating by 25% to 'Deterioration'

According to a report by Golden Finance, international rating agency Fitch Ratings stated on the 21st that policy risks have cast a shadow over the credit outlook of the United States. In its mid year update, Fitch downgraded its outlook for 25% of industries in the United States by 2025 to "deteriorating" due to increased uncertainty, slowing economic growth, and expectations that interest rates will remain high for the long term. Fitch Ratings stated that the recently passed tax and spending bills highlight the long-term challenges facing the US fiscal outlook and will put pressure on healthcare related industries. The combination of the tax bill and the extension of previous tax cuts is likely to keep the US government's total deficit above 7% of GDP and push the debt to GDP ratio to 135% by 2029. Fitch predicts that by 2025, the default rates of high-yield bonds and leveraged loans in the United States will rise to 4.0% to 4.5% and 5.5% to 6.0%, respectively. Policy development and industry-specific risks will continue to be the main driving factors for rating trends this year.