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Fitch Ratings is warning that it could downgrade the U.S. credit rating from AAA as talks over debt ceiling continue to go nowhere.
Fitch sees the constant struggle to make headway in increasing the ability of the U.S. to borrow has caused the company to question the country, Reuters reports.
The company released a statement saying, "Although Fitch continues to believe that the debt ceiling will be raised soon, political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default."
A U.S. Treasury spokesperson said that Fitch's comments are a reminder of how close the country is to heading towards default. The Treasury has also said that the United States will run out of cash to pay its bills on Oct. 17.
According to CBS News, Fitch placed the U.S. on a "rating watch negative," which could be the first move before a cut in the U.S. credit rating.
Fitch also said, "The prolonged negotiations over raising the debt ceiling (following the episode in August 2011) risk undermining confidence in the role of the U.S. dollar as the preeminent global reserve currency..."
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