Fitch Ratings on Tuesday expressed skepticism about a prompt resolution to the U.S. debt ceiling debate, despite a unified government under President-elect Donald Trump.
The agency cited the narrow Republican House majority and ongoing intraparty disagreements over spending policies as potential obstacles.
Fitch indicated that key fiscal policy decisions expected in 2025, including a debt-limit suspension or increase, might not be implemented quickly.
The ratings agency pointed out long-standing weaknesses in the federal government’s budgetary process as a contributing factor to the anticipated delays.
Fitch highlighted the fiscal policy challenges facing the U.S. and suggested that while policymakers are expected to eventually reach an agreement on the debt ceiling and other fiscal matters, such as the extension of the 2017 tax cuts expiring this year, the path to these decisions will likely be piecemeal and fraught with difficulties.
Fitch had previously downgraded the U.S. government’s credit profile in 2023 following a debt-ceiling crisis.
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