Fitch to Review US Rating If No Debt Ceiling Deal

WASHINGTON (AP) — Fitch Ratings is warning that it might downgrade U.S. debt if lawmakers fail to increase the nation's borrowing limit before the government runs out of money.

The rating agency says it will put the debt on watch for a possible downgrade in early August, if lawmakers have not reached a deal. The Treasury Department says it will exhaust its stopgap measures to delay a default on Aug. 2.

While Fitch expects the debt ceiling to be increased, it says a default by the U.S. on its debt obligations would "imply a crisis of governance" and threaten the stability of the world financial system.

It is not the first such warning. Moody's Investors Service made a similar announcement last week. Standard & Poor's did so in April.