Rating agency Fitch Ratings affirmed the U.S.'s sovereign debt rating at 'AAA'. The outlook is 'stable'.

"The U.S.'s 'AAA' rating is underpinned by the sovereign's unparalleled financing flexibility as the issuer of the world's pre-eminent reserve currency and benchmark fixed-income asset and as home to the world's deepest and most liquid capital markets," the agency said.

Fitch expects general government debt to increase to over 107% of GDP over the next decade from 101% of GDP in 2016, while federal fiscal deficit is expected to rise 2.9% of GDP in 2016 from 2.5% of GDP in 2015 according to the Congressional Budget Office.

The agency downgraded its growth forecasts to 2.1% in 2016 and 2017.

Fitch expects two interest rate hikes in 2016 and three in 2017.