Fitch Speaks Out: Federal Reserve 'Independence' Determines US Debt Rating Outlook

Fed Independence Emerges as Credit Rating Focus

Global rating agency Fitch has stated that the independence of the U.S. Federal Reserve plays a crucial role in maintaining the country's AA+ sovereign credit rating. This remark has sparked widespread discussion about the health of U.S. fiscal policy and the autonomy of its monetary system.

Shared Views from Rating Agencies

As early as October last year, S&P Global Ratings echoed a similar stance, identifying the Fed's independence as a key pillar supporting the U.S. credit rating. This suggests a growing consensus among major rating institutions regarding this issue.

The Interplay of Markets and Policy

• A loss of Fed independence could destabilize monetary policy decisions.
• Political interference may erode market confidence in central bank actions.
• A potential credit downgrade might lead to higher borrowing costs and broader economic impacts.

At present, U.S. fiscal policy faces multiple challenges. Striking a balance between economic stimulus and debt control has become a key issue for both the government and the central bank.