House Speaker Kevin McCarthy and Democratic President Joe Biden held a productive meeting, with both sides predicting an agreement is possible despite ongoing discussions.

However, ratings agencies such as Fitch have expressed concern about the impasse, with the company placing the US's "AAA" ratings on negative watch.

Time is running short as the Treasury Department has warned that the federal government could be unable to pay all its bills by June 1, and Congress will need to pass legislation quickly.

Any deal reached between Biden and McCarthy will need to be passed by a divided Congress, and concerns about a default remain.

This has caused anxiety in the financial markets, with US stock indexes falling on Wednesday and the nation's borrowing costs increasing.

Congress is currently in negotiations over the 2024 fiscal budget, with disagreements over proposed cuts to discretionary spending and changes to benefits programs for low-income Americans.

The White House has offered to limit discretionary spending for the next two years, while Republicans have proposed spending caps for the next six years.

Democrats have pushed for a steady level of government spending, while Republicans want to cut discretionary spending by 8%.

These disagreements could lead to a "Wall Street meltdown" and push the U.S. economy towards recession, affecting regular Americans, particularly medical providers who rely on government payments.

Negotiations over the budget and the debt limit are ongoing, and it remains to be seen if a deal can be reached.