Fitch puts Fannie Mae, Freddie Mac on negative watch as US debt deadline looms

Reuters

(Reuters) – Fitch has placed the ratings of U.S. mortgage finance giants Fannie Mae and Freddie Mac on watch for a possible downgrade as U.S. lawmakers’ negotiations to raise the government’s debt ceiling dragged on without a resolution.

This comes after the ratings agency on Wednesday had warned that the U.S. credit rating could be downgraded if a debt ceiling deal was not reached soon.

In a statement on Thursday evening, Fitch said the move reflected “uncertainty surrounding the resolution of the RWN (Rating Watch Negative) on the U.S.”

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Negotiators for Democratic President Joe Biden and top congressional Republican Kevin McCarthy on Thursday appeared to be nearing a deal to cut spending and raise the government’s $31.4 trillion debt ceiling, with little time to spare to head off the risk of default.


(Reporting by Akriti Sharma in Bengaluru; Editing by Anil D’Silva and Sherry Jacob-Phillips)


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