Fitch Downgrades Outlook for 25% of U.S. Industries to "Deteriorating"

According to a report by Jinse Finance, international rating agency Fitch stated on the 21st that policy risks are casting a shadow over the U.S. credit outlook. In its mid-year update, Fitch downgraded the outlook for 25% of U.S. industries in 2025 to "deteriorating," citing increased uncertainty, slowing economic growth, and expectations that interest rates will remain high for an extended period. Fitch noted that recently passed tax and spending bills highlight the long-term challenges facing the U.S. fiscal outlook and will put pressure on healthcare-related industries. The combination of the tax bill and the extension of previous tax cuts is likely to keep the total U.S. government deficit above 7% of GDP and push the debt-to-GDP ratio to 135% by 2029. Fitch forecasts that by 2025, the default rates for U.S. high-yield bonds and leveraged loans will rise to 4.0%-4.5% and 5.5%-6.0%, respectively. Policy developments and industry-specific risks will remain the main drivers of rating trends this year.