JOIN USThe action in the wake of the Congressional debt committee's failure to find agreement reflects "declining confidence that timely fiscal measures necessary to place US public finances on a sustainable path will be forthcoming," the company said Monday.
It also noted that a worsening in the economic outlook would further mar the fiscal picture.
The change indicates that the agency sees a slightly greater than 50 percent chance that it will downgrade the country's AAA rating within two years.
But in affirming the top US rating, Fitch said the US economy is still the most productive in the world and the government has "unparalleled financing flexibility."
The US bond market is the largest and most liquid in the world and the dollar is the global reserve currency, held by banks worldwide and a staple in international transactions.
As it is, Fitch estimates that US debt held by the public will hit 90 percent of GDP by the end of the decade, up from about 70 percent today. And interest payments on the debt would likely consume more than 20 percent of tax revenues.
"Failure to reach agreement in 2013 on a credible deficit reduction plan and a worsening of the economic and fiscal outlook would likely result in a downgrade of the US sovereign rating," the agency said.
Last week, two other major rating agencies, Standard & Poor's and Moody's Investors Service said the so-called super committee's inability to reach an agreement didn't merit downgrades because the inaction will trigger $1.2 trillion in automatic spending cuts.
Moody's affirmed its AAA rating. And S&P, which downgraded its US credit rating this summer because of the "political brinksmanship" in the debt ceiling debate, said it would keep its rating for US bonds at AA-plus for now.
Both agencies had previously assigned a negative outlook on their US rating.