The U.S. credit outlook turned deteriorating in mid-2026 as inflation and higher interest rates squeezed consumer spending and household finances, prompting major credit rating agencies to downgrade sector forecasts and signaling mounting stress across the economy.
On June 15, 2026, Fitch Ratings revised its midyear credit outlook for multiple sectors to “deteriorating” from “neutral,” citing a more challenging backdrop for U.S. credits. The agency lowered its 2026 GDP growth forecast to 1.9% from 2.2%, reflecting the adverse impact of an oil price shock partially offset by AI-driven investments.
Consumer spending, the primary driver of U.S. economic growth, is expected to slow materially to 1.7% in 2026 from 2.6% in 2025 as inflation eats into real household incomes, according to Fitch. The agency no longer expects any Federal Reserve rate cuts in 2026, having previously anticipated two 25-basis-point reductions. This shift leaves borrowing costs elevated at a time when households are already stretched.
Rising delinquencies underscored the stress on consumer credit. The percentage of U.S. credit card balances at least 90 days delinquent climbed to 13.12% in the first quarter of 2026, the highest level in 15 years, according to Fisher Investments and multiple financial sources. Credit card debt itself totaled $1.252 trillion as of Q1 2026, according to the latest Federal Reserve data reported by LendingTree on June 10, 2026.
Experian’s May 2026 macroeconomic forecast projected inflation to rise to 3.5% in 2026 before easing to 2.1% in 2027, with unemployment forecast to hold steady at 4.4%. The combination of persistent inflation and stagnant wage growth created what analysts called a K-shaped consumer dynamic, where higher-income households continued spending while lower-income consumers pulled back sharply.
Fitch’s sector outlook revisions reflected this bifurcation. Retail, restaurants, non-prime residential mortgage-backed securities, and several asset-backed securities sectors were marked as “deteriorating” and remained under pressure. The agency also revised outlooks for homebuilders, building products manufacturers, packaged foods producers, airlines, utilities, and finance companies to deteriorating, citing mounting affordability challenges driven by higher inflation and interest rate expectations.
The broader fiscal backdrop added to credit concerns. Fitch revised the North American Sovereigns outlook to “deteriorating” from “neutral,” projecting the U.S. general government deficit to widen to 7.9% of GDP in 2026 from 7.1% in 2025. General government debt was expected to exceed 120% of GDP by 2027, with November’s midterm elections introducing additional fiscal uncertainty.
The only bright spot in Fitch’s midyear update came from energy-related sectors. North American midstream energy and LNG infrastructure outlooks were revised to “improving,” supported by growing domestic and international demand for U.S. natural gas and AI data center-driven power generation growth. Global oil and gas outlooks also improved, lifted by higher-for-longer oil prices stemming from the Iran conflict.
Sources
- Fitch Ratings — midyear 2026 U.S. credit outlook revisions, GDP and consumer spending forecasts, sector outlook changes
- Fisher Investments — 90-day credit card delinquency rate at 13.1%, highest in 15 years
- LendingTree — U.S. credit card balance totaling $1.252 trillion in Q1 2026
- Experian — May 2026 macroeconomic forecast on inflation, unemployment, and GDP growth
- CNBC — Federal Reserve household debt and credit card balance data for Q1 2026
