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Agency affirms U.S. credit rating at highest level

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Fitch Ratings affirmed its AAA credit rating for the United States and said the outlook is stable, citing the nation’s central role in the global financial system and the flexible, diverse economy.

Fitch had put the rating under review after lawmakers reached a compromise Aug. 2 on a debt-limit agreement that prevented a U.S. default. Standard & Poor’s on Aug. 5 cut its U.S. credit rating to AA+ from AAA, saying lawmakers failed to cut spending enough to reduce record deficits. S&P’s move set off tumultuous swings on Wall Street last week.

Moody’s Investors Service affirmed its top U.S. ranking last week.

The U.S. may be placed on negative outlook should its debt levels rise more than projected, indicating more than a 50 percent probability that the nation will be downgraded in the next two years, Fitch said today in a statement.

Since S&P, the New York-based subsidiary of McGraw-Hill Cos., downgraded the U.S., the yield on the 10-year Treasury note, a benchmark for everything from home mortgages to car loans, has declined to as low as 2.03 percent from a high this year of 3.77 percent. Treasuries are on pace in August for the biggest monthly gain since December 2008. Interest rates on American bonds are lower today than on most of the countries with AAA ratings by S&P and the Treasury recently financed its outstanding debt at the lowest cost ever.

Marketable U.S. government debt outstanding has risen to $9.4 trillion from $4.34 trillion in mid-2007 as the government borrowed to bail out the nation’s banking system and lift the economy out of recession. The U.S. went from budget surpluses averaging $139.7 billion from 1998 through 2001 to a deficit of $1.29 trillion last year, Bloomberg data show. That hasn’t raised the country’s borrowing costs. Average debt yields of 1.5 percent in July compare with 6.54 percent in 2000.

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