Moody’s, an international credit rating agency, has downgraded the United States’ sovereign credit rating due to concerns about the country’s ballooning debt.
This move has cast a shadow over the United States’ status as the world’s highest – credit sovereign borrower. It may complicate former President Donald Trump’s tax – cut efforts and create ripples in global markets.
According to Reuters, data shows that the total debt of the U.S. federal government has exceeded $36 trillion . On Friday (May 16), Moody’s downgraded the U.S. sovereign credit rating from Aaa to Aa1, and at the same time adjusted the outlook for the U.S. sovereign credit rating from “negative” to “stable”.
Moody’s first assigned the Aaa rating to the United States in 1919 and was the last among the three major credit rating agencies to downgrade the U.S. rating. Previously, in 2023, Moody’s adjusted the outlook for the U.S. sovereign credit rating due to the expansion of the U.S. fiscal deficit and the increase in interest expenses.
Moody’s said in a statement on Friday: “Successive U.S. governments and Congresses have failed to reach an agreement on measures to reverse the trend of large annual fiscal deficits and rising interest costs.”
