One of the leading credit rating agencies is warning the United States could lose its "AAA" standing if Washington does not avert a default crisis before the June 1 "X-date."

Fitch Ratings placed the country on a "negative watch" on Wednesday, citing the "increased political partisanship" standing in the way of a deal to raise the debt ceiling.

MAKE OR BREAK: THIS WEEK INTO NEXT IS CRITICAL WINDOW FOR DEBT CEILING NEGOTIATIONS

The White House has been negotiating with House Speaker Kevin McCarthy (R-CA) since May 9, but the two sides have yet to reach a compromise as spending caps and work requirements remain sticking points in budget talks.

The Treasury Department is staving off default through the use of "extraordinary measures," but Secretary Janet Yellen has repeatedly warned that her agency will be unable to pay all of its bills as soon as early June.

The move by Fitch is not a credit downgrade but reflects the increased risk of a default. Two other credit ratings agencies, Moody's and S&P, issued a similar warning in 2011 when political gamesmanship brought Washington to the brink of economic catastrophe.

S&P followed through on the downgrade even though Biden, then an instrumental negotiator as vice president, helped broker a last-minute deal with Republicans.

Fitch predicted that leaders would be able to avert a default but cautioned that a failure to do so would be "a negative signal of the broader governance and willingness of the U.S. to honor its obligations in a timely fashion."

Dow Jones futures slipped briefly after Fitch released the note.

The White House has negotiated with McCarthy since the Republican-led House passed a bill to raise the debt ceiling in late April. The legislation has led to three sit-downs between Biden and the House leader in addition to daily staff-level talks.

McCarthy told reporters on Wednesday that the two sides had made progress after an hourslong meeting at the White House, but no deal had been reached by Wednesday night.

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House lawmakers will head back to their districts Thursday for the Memorial Day recess, though they've been instructed to return within 24 hours if needed once McCarthy and the president come to an agreement.

The White House has offered a two-year deal that would freeze next year's spending at fiscal 2023 levels, an inflation-adjusted cut that McCarthy has rejected amid pressure from his right flank.