Fitch puts U.S. on notice for downgrade

Rating agency Fitch put the U.S. on notice Tuesday for a possible downgrade, with lawmakers still struggling to resolve the debt ceiling crisis.

Fitch still has the U.S. rated AAA, the highest possible grade, but the country is now on "rating watch negative," meaning that there is increased possibility of a downgrade in the near future. "Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default," the agency said in a statement.

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

If the debt ceiling isn't raised by Thursday's deadline, the Treasury Department will not be able to borrow money to cover all its obligations, which include not only interest payments, but also Social Security, Medicare, military pay and much more. It's unclear exactly when Fitch will make a final decision on whether to go through with a downgrade.