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An analyst at Fitch Ratings has issued a caution that U.S. banks, including JPMorgan Chase, could face potential downgrades if the agency further reduces its assessment of the industry’s operating environment. This information comes from a report by CNBC on Tuesday (August 15, 2023).
Fitch had previously lowered the rating for the U.S. banking industry’s operating environment from AA to AA- in June. This action was attributed to factors such as pressure on the country’s credit rating, regulatory framework gaps, and uncertainty surrounding the trajectory of interest rate hikes.
Should there be an additional downgrade by one notch, from AA- to A+, Fitch would be compelled to reassess the ratings of over 70 U.S. banks under its coverage, as stated by analyst Chris Wolfe in the CNBC report.
This news follows the recent unsettling of lenders due to Moody’s, a peer of Fitch, downgrading 10 mid-sized U.S. banks and expressing potential rating cuts for several others earlier this month.
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