Investing.com -- Fitch Ratings affirmed the United States' long-term foreign and local currency issuer default ratings at AA+ with a stable outlook.

The rating agency cited the country's large economy, high per-capita income, dynamic business environment, and the U.S. dollar's role as the leading global reserve currency as key supporting factors. The dollar maintains a 58% share in global reserves and accounts for 89% of all over-the-counter operations. Foreign ownership in U.S. Treasuries has remained steady at close to 30% for the past five years.

Fitch projects U.S. economic growth at 1.9% for 2026-2027, down from 2.8% in 2025. The slowdown reflects higher tariffs, government spending cuts, tighter border controls, and increased policy uncertainties. Labor demand has weakened and job creation has dropped significantly in 2026.

The Federal Reserve's preferred inflation measure reached an annual rate of 3.7% in June, while core personal consumption expenditure stood at 3.3%. Fitch expects inflation to average 3.4% in 2026, above the forecast 2.9% median for AA-rated countries. The rating agency projects inflation will move toward the Fed's 2% target by year-end 2028.

Fitch forecasts the general government deficit will widen to 7.4% of GDP in 2026 from 6.8% in 2025. The increase stems from One Big Beautiful Bill Act tax cuts and $100 billion in tariff rebates as of July 2026. The deficit is projected to remain at 7.4% of GDP in 2027, the highest in the AA category.

General government debt-to-GDP is expected to rise to 123% by year-end 2028 from 117% at year-end 2025, more than double the AA median of 46.3% of GDP. Under current policy settings, debt would reach 128% of GDP by 2030. The general government interest-to-revenue ratio is forecast to reach 12.6% by 2028 from 11.8% in 2025, compared to the forecast AA median of 3.5%.

Fitch expects the $41.1 trillion debt ceiling will be reached in mid-2027. The Treasury's cash balance currently stands at $967 billion.

The rating agency noted that President Trump has challenged institutional checks and balances since taking office in January 2025. Courts have ruled against the administration in several areas including IEEPA tariffs and the ability to fire Fed board members.

Polls indicate the House of Representatives will flip to a slim Democratic majority following November's mid-term elections, while the Senate will remain under Republican control.