Fitch put the United States’ AAA long-term foreign-currency issuer default rating on negative watch Wednesday evening, pointing to brinksmanship over the debt ceiling.

“The Rating Watch Negative displays elevated political partisanship that’s hindering reaching an answer to boost or droop the debt restrict regardless of the fast-approaching x-date,” the rating company stated.

Futures linked to the Dow Jones Industrial Average briefly slipped about 100 factors after Fitch, one of many massive three rankings businesses, issued its notice.

The so-called X-date, which is when the U.S. might default on its debt, might arrive as early as June 1, in keeping with Treasury Secretary Janet Yellen.

Fitch famous that it nonetheless expects Washington officers to reach at a decision earlier than the deadline.

“However, we consider dangers have risen that the debt restrict is not going to be raised or suspended earlier than the x-date and consequently that the federal government might start to overlook funds on a few of its obligations,” the rating company stated.

The announcement arrives after debt ceiling negotiations between groups representing President Joe Biden and House Speaker Kevin McCarthy have fallen wanting an settlement.

On Wednesday, McCarthy stated that discussions over elevating the debt restrict were progressing towards a deal, however each events proceed to conflict over spending. McCarthy did provide hope {that a} deal can be reached earlier than the deadline. But House members have been knowledgeable their weeklong recess would start on Thursday, though they have been put on discover they may very well be known as again for a vote.