Overview

• Moody’s lowered the U.S. sovereign credit rating from Aaa to Aa1, citing rising deficits and high refinancing costs.
• Global markets reacted with declines in Asian and European equities, while U.S. stock futures fell over 1%.
• The yield on the 10-year U.S. Treasury climbed to near 4.5%, reflecting investor concerns over higher borrowing costs.
• U.S. Treasury Secretary Scott Bessent called the downgrade a 'lagging indicator,' downplaying its significance.
• Analysts warn the downgrade could further strain U.S. debt servicing and dampen investor confidence in Treasuries.