Fitch Warns Failure to Fix the Fiscal Cliff Could Hurt U.S. Rating

“LONDON (Reuters) – Ratings firm Fitch said on Wednesday it is more likely to strip the United Statesof its triple-A status if a political deal is not reached to halt $600 billion of spending cuts and tax hikes set for early next year.

“Failure to avoid the fiscal cliff … would exacerbate rather than diminish the uncertainty over fiscal policy, and tip the U.S. into an avoidable and unnecessary recession,” Fitch said in its 2013 global outlook, published on Wednesday.

“That could erode medium-term growth potential and financial stability. In such a scenario, there would be an increased likelihood that the U.S. would lose its AAA status.”

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