Moody’s Cuts US Rating Down as Deficits, Interest Costs Soar

Moody’s has downgraded the US sovereign credit rating from AAA to AA1, marking the first reduction since it began formally assessing US bonds in 1993.

The agency cited widening deficits, rising interest payments, and political paralysis as primary drivers, projecting federal debt to hit 134% of GDP and deficit-to-GDP of 9% by 2035.

The move aligns Moody’s with rivals Fitch and Standard & Poor’s, which downgraded the US in 2023 and 2011, respectively.

The decision followed a 13% year-over-year increase in the fiscal deficit to $1.05 trillion for the current fiscal year, with Moody’s warning that extending Trump−era tax cuts could add $4 trillion to deficits over a decade.

READ: House GOP Tax Bill: Raises Debt Limit By $4T, Spares the Wealthy

“Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” the agency stated.

White House spokesperson Kush Desai accused Democrats of fueling “runaway inflation” and defended Republican efforts to pass deficit-reduction legislation, while Senate Minority Leader Chuck Schumer labeled GOP tax proposals “deficit-busting.”

The House Budget Committee rejected a key Trump-backed tax bill hours before the downgrade.

Moody’s warned that without “material multi-year reductions” in spending, deficits could reach 9% of GDP by 2035—far exceeding Treasury Secretary Scott Bessent’s 3% target.


Information for this briefing was found via Politico, CNBC, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Uranium Is Back On America’s Radar | Corey Dias –  Anfield Energy

The Russell Will Lead the Next Market Crash!? | John Feneck

The Global Conflict Has Already Started | Bryan Cunningham

Recommended

ESGold Secures $9 Million In Non-Dilutive Funding From Ocean Partners

Altamira Gold Encounters Porphyritic Intrusive Rocks In Initial Scout Drilling At Regional Targets

Related News

Fitch Ratings Reaffirms China’s A+ Credit Rating Amid Strong Coronavirus Recovery

While much of the US economy continues to struggle through the coronavirus pandemic, it appears...

Wednesday, July 29, 2020, 08:43:00 PM

US Triple A Credit Rating in Jeopardy as Government Shutdown Nears, Moody’s Warns

Moody’s issued a warning that a potential government shutdown in the United States could jeopardize...

Thursday, September 28, 2023, 02:17:00 PM

Change In Moody’s: US Outlook Turned “Negative”

Moody’s Investors Service revised the outlook on the United States government’s credit rating from “stable”...

Monday, November 13, 2023, 11:12:00 AM

S&P Global Maintains Canada’s AAA Rating Despite Colossal Deficit

S&P Global Ratings has reiterated its top-notch credit rating for Canada, despite the government’s latest...

Tuesday, April 27, 2021, 02:17:00 PM

Canada’s Credit Rating Downgraded to AA+ Amid Increasing Coronavirus Costs

As a result of the mounting federal government spending on coronavirus mitigation efforts, Canada has...

Thursday, June 25, 2020, 01:03:00 PM