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6d ago

Moody's Downgrade Strips U.S. of Last Triple-A Credit Rating

The move highlights decades of rising debt and fiscal challenges, as Congress debates a controversial tax-and-spending bill that could deepen deficits.

A graduate has her photo taken at the U.S. Capitol on the day U.S. President Donald Trump's sweeping tax bill failed to clear a key procedural hurdle as hardline Republicans demanding deeper spending cuts blocked the measure in a rare political setback for the Republican president in Congress, in Washington, D.C., U.S., May 16, 2025. REUTERS/Kevin Lamarque
A visiting school group takes a class photo at the U.S. Capitol, on the day U.S. President Donald Trump's sweeping tax bill failed to clear a key procedural hurdle as hardline Republicans demanding deeper spending cuts blocked the measure in a rare political setback for the Republican president in Congress, in Washington, D.C., U.S., May 16, 2025. REUTERS/Kevin Lamarque
A person walks the grounds of U.S. Capitol on the day U.S. President Donald Trump's sweeping tax bill failed to clear a key procedural hurdle as hardline Republicans demanding deeper spending cuts blocked the measure in a rare political setback for the Republican president in Congress, in Washington, D.C., U.S., May 16, 2025. REUTERS/Kevin Lamarque/File Photo
U.S. President Donald Trump speaks during a swearing-in ceremony of Special Envoy Steve Witkoff in the Oval Office at the White House in Washington, D.C., U.S., May 6, 2025. REUTERS/Kent Nishimura/File Photo

Overview

  • Moody's has downgraded the U.S. sovereign credit rating from Aaa to Aa1, citing over a decade of rising debt and interest payment burdens.
  • This marks the loss of the nation's last top-tier credit rating, following earlier downgrades by S&P in 2011 and Fitch in 2023.
  • The national debt now exceeds $36 trillion, with analysts warning of potential long-term increases in public and private borrowing costs.
  • Congress is debating the so-called 'Big Beautiful Bill,' a Republican-backed fiscal package that could add trillions to the debt, intensifying investor concerns.
  • The White House dismissed the downgrade as politically motivated, while market reactions remain cautious but focused on fiscal policy developments.