From The LA Times:

A U.S. default would have severe reverberations in global markets, a top Federal Reserve official said just hours after Fitch Ratings warned it could slash U.S. credit ratings if the government misses bond payments.

St. Louis Federal Reserve Bank President James Bullard said "the U.S. fiscal situation, if not handled correctly, could turn into a global macro shock."

Some Republican lawmakers have said a brief default, which would be inevitable in August if lawmakers fail to raise the nation's $14.3-trillion debt ceiling, might be acceptable if it forces the White House to deal with large budget deficits. More here.