Benign U.S. Credit Backdrop Faces AI, Consumer, Trade Risks – Fitch
The U.S. credit outlook is broadly benign entering 2026, supported by AI-led capex, easing monetary policy and strong fiscal support, says Fitch Ratings.
Fitch forecasts gross domestic product (GDP) growth of 2.0% in 2026, with the Federal Reserve expected to cut rates twice in 1H-2026, lowering the policy rate to 3.25% by year end.
According to Fitch, continued rate cuts should sustain favorable funding and liquidity conditions, driving modest declines in leveraged finance default rates through 2026.
AI investment is a key growth driver as data center, chip, and power infrastructure capex lifts private investment and equity wealth effects, Fitch said.
However, concentration risks are rising given hyperscalers’ outsized, debt-assisted capex, raising bubble concerns and potential spillovers if funding appetite cools. Sector outlooks tied to data centers are mostly neutral, with improving prospects for U.S. data center REITs.
“Aggregate consumer spending has been resilient, but dynamics are increasingly K-shaped. The wealth effect is driving spending from higher income households, while lower income and subprime cohorts face tighter budgets and rising delinquencies.
“This bifurcation underpins deteriorating outlooks in several consumer-linked sectors (e.g. retail, restaurants, consumer finance, select ABS and non-prime RMBS), while prime exposures remain broadly stable.
“Geopolitical and trade risks are set to intensify in 2026, with the midyear United States Mexico Canada Agreement (USMCA) review and broader tariff uncertainty weighing on volume sensitive and supply chain complex sectors”.
The global autos, chemicals, shipping and North American seaports sectors have ‘deteriorating’ outlooks, while the outlook for North American logistics & freight transportation remains ‘neutral’.
Most sector and asset performance outlooks are ‘neutral’ for 2026. Rating Outlooks are balanced for investment grade, with a slight negative bias in sub-investment grade, particularly in CMBS. First Holdco Gains 12.8% as Investors Tag Along with Otedola
