Fitch's Inside Credit: Where to Now for the U.S. Recovery?

NEW YORK--()--The latest edition of Fitch Ratings' Inside Credit newsletter explores the next steps in the U.S. economic recovery.

For the first time since the early 1980s, the U.S. economic outlook may face a simultaneous increase in indebtedness and interest rates. While current conditions aren't unique, neither the household nor corporate sector is particularly well placed for a higher interest rate environment.

"The critical question is: what will happen to 10-year Treasury yields as monetary policy is tightened in the current cycle?" says James McCormack, global head of sovereign ratings. "The higher levels of household and corporate debt this time around suggest the potential for a much more negative impact in terms of debt sustainability and economic performance."

Other topics covered in this week's edition of Inside Credit include:

-U.S. rate risks to large emerging markets have shifted since the taper tantrum

-EU bank bail-in rules may change short-term investor behavior

-Drop in oil prices leads energy sector to show the most downgrades

-Search for yield leads to more risks in credit funds

-EU banks short-term ratings under pressure from bank resolution

-U.S. bank earnings still pressured by rates

-Japan downgraded to 'A'

-Nordic banks' wholesale funding stable but not risk free

-Strong start for sukuk in tough market conditions

-Irish RMBS see first sustained fall in arrears since 2005

-James McCormack speaks at the Milken Institute Global Conference

-Fitch's Global Banking Conference scheduled for June

'Inside Credit' is a weekly snapshot of Fitch Ratings' noteworthy content, selected from all sectors and regions. To receive the weekly edition, distributed every Friday at 8am ET, please sign up here: http://pages.fitchemail.fitchratings.com/InsideCreditSignUp/

Additional information is available on www.fitchratings.com

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Contacts

Fitch Ratings
Media Relations:
Alyssa Castelli, +1 212-908-0540
alyssa.castelli@fitchratings.com
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Media Relations:
Alyssa Castelli, +1 212-908-0540
alyssa.castelli@fitchratings.com
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com