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

(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.”

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)