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- October 23, 202613°
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- INTEREST36.00%-1.00
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- October 23, 202613°
Fitch affirms the United States’ credit rating and flags rising debt
Fitch Ratings projects that U.S. public debt will reach 123% of GDP by the end of 2028. The agency expects the budget deficit to remain at 7.4% of GDP in 2026 and 2027 while affirming the United States’ credit rating at AA+.
Fitch Ratings affirmed the United States’ long-term foreign-currency issuer default rating at AA+ and maintained a stable outlook. The agency identified high budget deficits, a significant interest burden and rising public debt as the main factors constraining the rating.
Fitch said the ratio of U.S. public debt to GDP stood at 117% at the end of 2025 and expects it to rise to 123% by the end of 2028. The ratio is projected to be more than twice the median for countries in the AA rating category. Fitch also assessed that the U.S. government had not taken meaningful steps to reduce its high budget deficits.
The debt ceiling could be reached in mid-2027
According to Fitch’s forecast, the United States will reach its statutory debt ceiling of $41.1 trillion in mid-2027.
The United States’ large economy, high per capita income, dynamic business environment and strong financing flexibility stemming from the dollar’s status as the world’s leading reserve currency were listed as factors supporting the rating.
Budget deficit expected to remain at 7.4%
The general government budget deficit is expected to widen to 7.4% of GDP in 2026 and remain at that level in 2027. Fitch projects that this will be the highest deficit among countries with an AA credit rating.
An aging population is expected to increase spending pressures over the next 10 years. Rising military spending and interest costs, along with increases in Medicare and Social Security spending, are expected to constrain efforts to reduce the budget deficit.
Growth and inflation expectations
Fitch expects the U.S. economy to grow by an average of 1.9% in 2026 and 2027 despite higher tariffs, cuts in public spending, tighter border controls and rising policy uncertainty.
The agency viewed the economy’s resilience in the face of tariff changes and sudden increases in oil prices as evidence of the United States’ capacity to absorb shocks. At the same time, it noted that labor demand had weakened and that employment growth slowed markedly in 2026.
Annual inflation is expected to average 3.4% this year, remaining above the Federal Reserve’s 2% target. Inflation is projected to approach the target toward the end of 2028.
Fitch noted that tariffs had increased core goods inflation, but that the impact on consumer prices had initially been more limited than expected.
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