Gary Jenkins, head of fixed income research at brokers Evolution, said there was a "high probability" of the Standard & Poor's rating agency downgrading the US from its coveted triple A rating.
"Probability of the debt ceiling being raised – high. Probability of the US achieving a credible solution to the rising debt burden in the foreseeable future – low. Probability of S&P downgrading the US sovereign rating over the next three months – high."
Moody's has also warned thatit could downgrade the US.
As reported in the Financial Times (paywall) on Monday Egan-Jones became the first US rating agency to downgrade the country’s sovereign credit rating from triple A to double A plus as it focuses on the rapid rise in outstanding debt over the past five years.
Egan-Jones was officially recognised in 2008 by the Securities and Exchange Commission and, unlike its larger rivals, generates revenue from institutional investors and not from issuers of debt.
A vote will take place on Tuesday that could cut the level of spending to 18% of the economy by 2021.