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18h ago

Moody’s Downgrades U.S. Credit Rating, Ending Triple-A Era

The downgrade reflects concerns over rising debt and deficits as Congress debates a tax-and-spending package that could further strain fiscal stability.

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
U.S. financial markets have been surging since President Donald Trump has paused or rolled back some of his tariffs.
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
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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 final loss of triple-A status among major credit agencies, following downgrades by S&P in 2011 and Fitch in 2023.
  • The U.S. national debt has reached $36 trillion, with ongoing legislative proposals potentially adding trillions more over the next decade.
  • Financial markets saw modest reactions, with Treasury yields rising and equity futures dipping, though analysts predict limited long-term disruption.
  • Treasury Secretary Scott Bessent and the White House dismissed the downgrade as politically motivated, while bond market concerns over fiscal discipline persist.