Fitch affirms US credit rating

International credit rating agency Fitch Ratings affirmed the US's long-term credit rating at "AA+".

Fitch announced that the US long-term credit rating was confirmed at "AA+" and the outlook was determined as "stable".

In the statement, which touched on the factors affecting the rating, it was noted that the United States benefits from its large economy, high per capita income, dynamic business environment and financing flexibility.

The statement emphasized that high fiscal deficits, significant interest burden, and high and rising public debt levels limit the rating, and stated that the United States has not taken meaningful steps to address large fiscal deficits, the rising debt burden, or the impending spending increase associated with an aging population.

The statement noted that important policy initiatives are gaining momentum, and it was recalled that the US President Donald Trump administration has begun to implement policies such as tax cuts, higher customs duties, increased deportation of illegal immigrants, and reductions in federal regulations.

$250 BILLION IN REVENUE FROM CUSTOMS DUTY

The statement stated that the US general government deficit to gross domestic product (GDP) ratio, which was 7.7 percent in 2024, is estimated to decline to 6.9 percent in 2025 due to the significant increase in revenues.

It was noted in the statement that the current customs duty rate in the United States, which was 2.3 percent at the end of last year, increased to 16 percent as of August, and that the country's customs duty revenues are expected to increase from $77 billion to $250 billion this year.

The statement stated that the general government deficit is estimated to rise to 7.8 percent of GDP in 2026 and 7.9 percent in 2027.

In the statement, it was stated that the US debt-to-GDP ratio is expected to reach 124 percent by the end of 2027 from 114.5 percent by the end of 2024, and that the US's medium-term debt trend continues to be upward, increasing the country's vulnerability to future economic shocks.

The statement pointed out that the US administration’s frequent criticism of US Federal Reserve (Fed) Chairman Jerome Powell and the departure of the Head of the Bureau of Labor Statistics increased concerns about intervention in economic data and monetary policy.

Despite rising debt levels, the federal government maintains strong financing flexibility thanks to the dollar's dominant share of global reserves, the statement said, emphasizing that the dollar remains the most important currency for global trade, payments, and financial markets.

THIS YEAR'S GROWTH IS 1.5 PERCENT

The statement noted that higher tariffs, government spending cuts, stricter border controls and deportations, and increased policy uncertainty have slowed consumer spending and business investment.

The statement noted that labor demand has weakened and employment growth has fallen, and that the US's annual average economic growth, which was 2.8 percent in 2024, is projected to slow down to 1.5 percent in 2025.

The statement stated that 1.5 percent growth is expected in 2026 as continuing policy uncertainty, rising inflation, prolonged high interest rates and a weakening labor market negatively affect consumer spending and business investments.

It was stated that the interest rate cuts that accelerate next year will stimulate domestic demand at the beginning of the second half of 2026, and that growth is projected to rise to 2.1 percent in 2027.

3 INTEREST RATE CUTS EXPECTED IN 2026

While inflation has recently fallen short of expectations and there is limited evidence that tariffs have caused increases in core goods prices, annual consumer inflation is projected to rise to 3.8 percent in December as goods prices rise for the rest of the year, the statement said.

Considering the inflationary pressures stemming from customs duty increases and the rise in some medium-term inflation expectations indicators, the Fed will continue to act cautiously regarding interest rate cuts, the statement noted, and a 25 basis point cut is projected this year and three interest rate cuts are projected in 2026.