Negotiators for Democratic President Joe Biden and top congressional Republican Kevin McCarthy held what both sides called productive talks on Wednesday. White House spokesperson Karine Jean-Pierre said talks remain fruitful.

Negotiators for Democratic President Joe Biden and top congressional Republican Kevin McCarthy held what both sides called productive talks on Wednesday to try to reach a deal to raise the United States' $31.4 trillion debt ceiling and avoid a catastrophic default.

After a four-hour White House meeting, U.S. House Speaker McCarthy said negotiations had improved and would continue in the evening. He predicted the two sides would reach an agreement, though several issues remain unresolved.

"We've made some progress working down there. So that's very positive," McCarthy told reporters. "I want to make sure we get the right agreement. I can see that we're working towards that."

White House spokesperson Karine Jean-Pierre said talks remain fruitful.

"If it keeps going in good faith, we can get to an agreement here," she said at a briefing while discussions were taking place.

But the White House and congressional Democrats also accused Republicans of taking the economy hostage to advance an agenda they could otherwise not pass. They said Republicans need to make more concessions as they will need Democratic votes to pass any deal.

"Just listen to members of The House Freedom Caucus... now openly referring to the full faith and credit of the United States as a hostage," Jean-Pierre, the White House spokesperson, said.

Ratings agency have taken note of the impasse with McCarthy insisting on spending cuts while Biden wants to hold spending steady.