Moody’s downgrades US credit rating from top level for first time amid fears over soaring debt

Oliver O'Connell

Fri, May 16, 2025, 2:50 PM 1 min read

Moody’s has slashed the credit rating of the U.S., bringing it down a notch to Aa1 from the highest triple-A rating, implicit the government’s monolithic fund shortage and precocious involvement rates.

The determination sees Moody’s drawback up with the different 2 large recognition standing agencies, which some downgraded the U.S. immoderate clip ago.

The bureau said it did not spot a existent effort by the authorities to chopped spending and that it expected the U.S.'s fiscal show to deteriorate compared with different highly developed economies.

It further said that President Donald Trump’s tariffs volition importantly wounded the nation's semipermanent maturation and that it expects the national indebtedness load to emergence to astir 134 percent of GDP by 2035.

“This one-notch downgrade connected our 21-notch standing standard reflects the summation implicit much than a decennary successful authorities indebtedness and involvement outgo ratios to levels that are importantly higher than likewise rated sovereigns,” Moody’s said successful a statement.

The U.S. has a monolithic fund shortage of $1.05 trillion, twelvemonth to date, and 13 percent higher than a twelvemonth ago. Interest costs for Treasury indebtedness proceed to ascent owed to higher rates and from having much indebtedness to finance.

Moody’s has held U.S. sovereign indebtedness astatine the highest recognition standing imaginable for the longest, with rival agencies Standard & Poor’s having downgraded the state to AA+ from AAA successful August 2011, and Fitch Ratings having done the aforesaid successful August 2023.

More follows...