Instant view: Fitch revises U.S. rating outlook to negative
NEW YORK (Reuters) - Fitch Ratings on Monday revised to negative the outlook on the United States' AAA credit rating after a Congress committee failed last week to agree on at least $1.2 trillion in deficit-reduction measures.
THOMAS SIMONS, VICE PRESIDENT AND MONEY MARKET ECONOMIST, JEFFERIES AND CO., NEW YORK
"It doesn't look like the market moved on it. The downgrade, itself, won't come until 2013 per the report and this has been well known as a risk since the Congressional 'super committee' failure. The market is more focused on Europe, the Fed buying the long-end, and risk aversion heading into month- and year-end."
MARK VITNER, SENIOR ECONOMIST, WELLS FARGO, CHARLOTTE, NORTH CAROLINA
"This does not surprise me at all as not a great deal has been done to improve the long term prospects for bringing down the deficit. Being a little more cautious ahead of a downgrade is instructive given what is happening in Europe. There is little prospect of a miraculous plan to come up with a way to reduce the deficit that would unite Democrats and Republicans and so this announcement makes sense."
WARD MCCARTHY, CHIEF FINANCIAL ECONOMIST, MANAGING DIRECTOR, FIXED-INCOME DIVISION, JEFFERIES & CO., NEW YORK
"It confirms what is generally expected, and nothing is imminent. The biggest risk for another downgrade would be Congress undoing the sequester in 2011. Congress has a time-honored tradition of undoing budget fetters, but it is too early to get a handle on the strength of the 'undo the sequester' movement at the current juncture."
JIM CARON, HEAD OF INTEREST RATE STRATEGY, MORGAN STANLEY, NEW YORK Continued...