Fitch puts US credit rating on negative watch

WASHINGTON (AP) — The Fitch credit rating agency has warned that it is reviewing the U.S. government's AAA credit rating for a possible downgrade, citing the impasse in Washington that has raised the threat of a default on the nation's debt.

Fitch placed the U.S. credit rating on negative watch today, a step that would precede an actual downgrade. The agency said it expects to conclude its review within six months.

The announcement comes as House and Senate leaders face a Thursday deadline to raise the nation's $16.7 trillion borrowing limit. Fitch says it expects the debt limit to be raised soon. But it adds, "the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default."

A Treasury Department spokesman said Fitch's announcement "reflects the urgency with which Congress should act to remove the threat of default hanging over the economy."

Dow Jones industrial futures were essentially unchanged this evening. Fitch made its announcement after financial markets had closed.