Fitch Ratings says Fed independence is key factor for US sovereign rating

NEW YORK, Jan 12 (Reuters) - Fitch Ratings said on Monday it views the Federal Reserve's independence as a key supporting factor for its AA+ U.S. sovereign rating.

The credit rating agency will continue ?to monitor evolution of governance, including "institutional checks and balances," as well as ?the performance of the Fed in delivering low and ?stable inflation in its assessment of ?the U.S. sovereign ?rating, said Richard Francis, senior director at Fitch Ratings, in emailed comments.

The ?Fitch comments come after ?the Trump administration threatened to indict Federal Reserve Chair Jerome Powell over Congressional testimony he gave ?last summer about a ?Fed building ?project, an action Powell called a "pretext" to gain more influence over the central bank and monetary policy.

Credit ?ratings agency S&P Global Ratings has also cited the credibility of the Fed as a key ratings strength for the U.S. sovereign rating. In an October report, S&P Global said ratings "could come under pressure if ?political ?developments weigh on the strength of American institutions and the effectiveness of long-term policymaking or independence ?of the Fed."

"We continue to view the credibility of the Fed as unparalleled," S&P Global said in the October report. "This supports U.S. monetary flexibility and the role of the dollar as the premier international reserve currency-both of which are key components ?of the sovereign rating."

Asked on Monday to comment on the latest developments, an S&P spokesman referred to the credit agency's previous reports.

(Reporting ?by Lewis Krauskopf and Davide Barbuscia; Editing by Nick Zieminski)