Italy bond yields jump as Fitch upgrades credit rating

Italy’s 10-year government bond yield rose to around 3.57%, the highest since early September, following Fitch’s upgrade of the country’s credit rating to BBB+ from BBB with a stable outlook—its first upgrade since 2021.

The move reflects growing confidence in Italy’s fiscal trajectory, supported by a record of increasing fiscal prudence, structural revenue improvements, and strict expenditure control, as well as a strong commitment to meeting short- and medium-term fiscal targets.

The deficit is expected to fall to the EU’s 3% of GDP threshold next year.

Finance Minister Giancarlo Giorgetti said Italy has been “brought back on the right path.”

Following Fitch’s upgrade, market focus shifts to Moody’s, which currently rates Italy at Baa3—just one notch above junk.

Of the five collateral assessment agencies recognized by the European Central Bank, four have already upgraded Italy by two notches.