Fitch affirmed the US credit rating at “AA+”, highlighting concerns over rising debt levels while also citing the country’s large, high-income economy, and its financing flexibility due to the dollar’s role as global reserve currency.

High fiscal deficits and increasing government debt levels constrain the US rating, even if a surge in revenue from President Donald Trump’s sweeping tariffs is expected to reduce the deficit this year, Fitch said in a statement.

“The US has not taken meaningful action to address its large fiscal deficits, rising debt burden, or the looming increase in spending tied to an aging population,” it said.

In 2023, Fitch downgraded the US sovereign rating by one notch from its previous top, triple-A rating, pointing to expected fiscal deterioration and repeated down-to-the-wire debt ceiling negotiations.

This year, credit ratings agency Moody’s also downgraded the US sovereign credit by one notch, citing rising debt levels and stripping the country of its last triple-A rating.

Despite rising debt, the dollar’s 58% share in global reserves underpins the US government’s financing capacity, Fitch said, adding that it expects the greenback’s dominance in trade and finance to persist even amid policy uncertainty.

Fitch said it expects the general government deficit to narrow to 6.9% of GDP in 2025 from 7.7% in 2024, driven by resilient economic growth, solid stock market performance, and a surge in tariff revenues.

The agency forecasts tariff revenues to jump to US$250 billion this year, from US$77 billion in 2024.

Longer term, it expects deficits to increase, with debt-to-GDP rising to 127% by 2027 from 114.5% at the end of last year.

“Fitch’s debt dynamics model indicates that the medium-term debt trajectory remains upward, increasing the US’s vulnerability to future economic shocks,” it said.

Still, Fitch said the country’s rating outlook remained stable.

The ratings affirmation follows S&P Global, which earlier this week maintained its “AA+” rating on the US, citing tariff revenues as a potentially important offset to the fiscal strain from Trump’s tax cuts and spending bill.