OREANDA-NEWS. The U.S. Fitch Fundamentals Index (FFI) fell slightly in 1Q'15 but remains in neutral territory, as the rate of credit improvement continues to diminish in some sectors.

'Six years after the start of the economic recovery, the rate of improvement in credit quality is slowing in some asset classes,' said Bill Warlick, Fitch Ratings Senior Director 'While turning up only very slightly, U.S. prime credit card delinquency rates have risen for two consecutive quarters and the rate of improvement for RMBS delinquencies continued to slow in 1Q.'

Investors continued to push credit spreads lower against a backdrop of rising interest rate risk and generally weak global economic growth fundamentals.

U.S. CDS spreads tightened modestly in 1Q, reaching a new post-crisis low at just over 100bp. This represents a decline of greater than 80%, or more than 500bp, from when spreads spiked back in late 2008. The FFI CDS outlook score remained unchanged at 0 in the quarter, but the underlying data trend highlights credit investors' continuing reach for yield, even as the Fed moves closer to raising short-term interest rates.

The FFI has remained neutral for several quarters, in line with the general growth path of the U.S. economy. The 1Q FFI results point to a continuation of this trend, with few signs of dramatic shifts in credit conditions across the economy.

U.S. Fitch Fundamentals Index

The Fitch Fundamentals Index (FFI) tracks changes in credit fundamentals across key sectors of the U.S. economy. Analyzing the relative strength or weakness of the index or its sub components can provide insight into how conducive conditions in the U.S. are towards economic growth.

The trend in potential drivers or constraints on economic growth or decline is indicated by the relative strength or weakness of the FFI, ranging from +10 to -10. The FFI's components include mortgage and credit card performance, corporate defaults, high-yield recoveries, rating actions and outlooks, EBITDA and CapEx forecasts, banks, the CDS outlook, and transportation trend. Released quarterly, the FFI relies primarily on proprietary Fitch-sourced data.

To learn more about the FFI, please visit 'www.thewhyforum.com/ffi'.

Fitch Ratings

Fitch Ratings is a leading provider of credit ratings, commentary and research. Dedicated to providing value beyond the rating through independent and prospective credit opinions, Fitch Ratings offers global perspectives shaped by strong local market knowledge and deep credit market experience. The additional context, perspective and insights we provide help investors to make important credit judgments with confidence. For more information, visit 'www.fitchratings.com'.

Fitch Group is a global leader in financial information services with operations in more than 30 countries. In addition to Fitch Ratings, the group includes Fitch Solutions, an industry-leading provider of credit risk products and services, and Fitch Learning, a preeminent training and professional development firm. Fitch Group is jointly owned by Paris-based Fimalac, S.A. and New York-based Hearst Corporation.