The ratings agency Fitch warned Wednesday that the United States' credit rating could be downgraded if lawmakers fail to reach a deal to avert the fiscal cliff:
Fitch has identified the US fiscal cliff as the single biggest, near-term threat to the world economy, given its potential to tip the US into an unnecessary and avoidable recession, with negative implications for global growth. However, the agency's base case expectation is that a compromise will be reached to avoid the USD600bn of tax increases and spending cuts due to come into effect on 1 January 2013. Fitch still anticipates a material fiscal tightening of 1.5% in the US economy in 2013, but this falls well short of the 5% implied by the fiscal cliff. If the negotiations on the fiscal cliff and raising the debt ceiling extend into 2013 and appear likely to be prolonged with adverse implications for the economy and financial stability, the US sovereign rating could be subject to review, potentially leading to a negative rating action.