Moody's strips U.S. government of top credit rating, citing Washington's failure to rein in debt

PAUL WISEMAN

Fri, May 16, 2025, 2:35 PM 1 min read

WASHINGTON (AP) — Moody's Ratings stripped the U.S. authorities of its apical recognition standing Friday, citing successive governments' nonaccomplishment to halt a rising tide of debt.

Moody's lowered the standing from a gold-standard Aaa to Aa1 but said the United States "retains exceptional recognition strengths specified arsenic the size, resilience and dynamism of its system and the relation of the U.S. dollar arsenic planetary reserve currency.''

Moody's is the past of the 3 large standing agencies to little the national government's credit. Standard & Poor's downgraded national indebtedness successful 2011 and Fitch Ratings followed successful 2023.

In a statement, Moody's said: "We expect national deficits to widen, reaching astir 9% of GDP by 2035, up from 6.4% successful 2024, driven chiefly by accrued involvement payments connected debt, rising entitlement spending, and comparatively debased gross generation.''

Extending President Donald Trump's 2017 taxation cuts, a precedence of the Republican- controlled Congress, Moody's said, would adhd $4 trillion implicit the adjacent decennary to the national superior shortage (which does not see involvement payments).

A gridlocked governmental strategy has been incapable to tackle America's immense deficits. Republicans cull taxation increases, and Democrats are reluctant to chopped spending.