Credit rating agency Fitch has warned that the US could lose its AAA rating if the US government fails to raise the debt ceiling before June 1. Fitch has put the US rating on ‘rating watch negative’, meaning it could be downgraded soon.

The U.S. government is at risk of defaulting on debt if President Joe Biden and the Republican opposition fail to reach an agreement on raising the debt ceiling. According to the US Treasury Department, unless a deal is struck before June 1, the government will run out of money from that date and the country will no longer be able to meet its debt obligations. It will have huge financial consequences worldwide.

Fitch expects Democrats and Republicans to not let it go and reach an agreement before June 1 on raising the debt ceiling. “However, we believe the risks are heightened as the debt ceiling is not raised or suspended before that date, and the government may default on some of its obligations,” the credit bureau said in a statement.

The last time the United States’ credit rating was downgraded was in 2011, when credit bureau S&P downgraded its rating because of a dispute between Democrats and Republicans over the debt ceiling.