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The financial and economic impact of the Covid-19 outbreak has Fitch Ratings cutting its outlook on U.S. banking sector to negative from stable.

The rating agency said that in the short term, it expects most banks to face “meaningful profitability challenges,” with the U.S. Federal Reserve dropping interest rates to the 0.00% and 0.25% range.

Fitch believes the drop in rates will hurt the banks’ spread revenue for “a number of quarters” and that fee income will also be reduced by a drop in client activity.

Provisions for credit losses are expected to rise too.

“To be clear, Fitch had already expected a more challenging operating environment for earnings going into 2020, but the expected levels of earnings compression is well-outside what was contemplated toward the end of last year,” the rating agency said.

Fitch noted that it will review its U.S. bank ratings to incorporate an assessment of the earnings and credit quality impact of the outbreak.

Individual banks that already had a negative outlook before the revision to the outlook for the sector “may be most exposed” to a rating downgrade in the short-term, Fitch said.