FRANKFURT (MarketWatch) -- The temporary suspension of the U.S. federal government's debt limit removes the near-term risk to the country's AAA
rating, Fitch Ratings said Monday. The ratings firm previously warned that failure to increase the debt limit in a timely manner would prompt a review of the sovereign rating. "Without the distraction of a near-term funding crisis for the federal government, Congress and the administration have the space to focus on the substantive fiscal policy choices necessary to place public finances on a sustainable path over the medium to long-term," Fitch said, in a news release. Fitch said an agreement on a credible medium-term deficit-reduction plan consistent with sustaining the economic recovery would likely result in an affirmation of the AAA rating and a revision of the rating outlook to stable from negative. Without such a plan, "the negative outlook would likely be resolved with a downgrade later in 2013," Fitch said.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
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