Fitch puts multiple US govt-linked securities on negative watch as debt deadline looms

(Reuters) – Ratings agency Fitch on Friday placed a raft of U.S. government-related securities on watch for a possible downgrade, as talks over the debt ceiling dragged on.

Fitch said it has placed the “AAA” ratings of certain categories of debt that are directly tied to the creditworthiness of the U.S. or its related entities on negative watch.

Drawn-out negotiations between the White House and Republicans to raise the $31.4 trillion debt ceiling have unnerved markets and fanned worries about the economic impact of a possible default.

Fitch on Wednesday had warned that the U.S. credit rating could be downgraded if a debt ceiling deal was not reached soon. It also placed ratings of U.S. mortgage finance giants Fannie Mae and Freddie Mac (OTC:) on watch for a possible downgrade on Thursday.

Other global rating agencies have also notified of a downgrade of the country if a deal is not reached soon. A downgrade could affect the pricing of trillions of dollars of Treasury debt securities.