Fitch provokes a tsunami: the US rating is under threat

Fitch provokes a tsunami: the US rating is under threat US parliamentarians are far from consensus on the debt problem and this puts pressure on the market. Signals from speaker McCarthy are positive, but US indices continue to close in the red, and European assets are starting to get nervous.European speculators have upped their bets on the Fed's interest rate correction following an unexpectedly strong rise in core inflation in the UK in April. On Wednesday, buying volumes of interest-bearing options increased, which will become profitable if the Fed rates remain at the peak for longer than 3 months.Raising the debt ceiling before the meeting on June 14 remains the Fed's main market factor.The US Treasury is trying to mitigate the inevitable fall in the market: first, Yellen asked federal agencies to allow them to make payments later, and then it became known that the Treasury would begin to actively place government bonds to replenish reserves.According to Penso Advisors LLC, by the end of Q3, the regulator will withdraw about $1 trillion from the financial system. Analysts at Bank of America compare the effect of this liquidity outflow to a 25 bp Fed rate hike.The MOF's entry into the market could also tighten financial conditions and reduce the amount of money available to commercial banks. This means that the US financial system will receive a third wave of bank defaults.Investor panic is growing: PacWest Bancorp (NASDAQ: PACW) stock lost more than 3% iShares U.S. Regional Banks ETF (NYSE: IAT) was down 1.6%.Fitch Ratings has placed the US long-term foreign-currency issuer default rating at 'AAA' on its Rating Watch Negative list. And this is really dangerous.So far, speculators have reacted weakly to this news, but if Fitch decides, following S&P, to downgrade the US rating, then the markets will not avoid a catastrophe.Profits to yall!#ForexChief #Fitch #forexnews #StopLoss #stocks #market #profit #Traders #fed