Moody’s on Friday downgraded its credit rating of the United States by a notch to “AA1” from “AAA,” citing rising debt and interest “that are significantly higher than similarly rated sovereigns.”
The rating agency had been the last among major ratings agencies to keep a top, triple-A rating for U.S. sovereign debt, though it had lowered its outlook in late 2023 due to wider fiscal deficit and higher interest payments.
“Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” Moody’s said on Friday, as it changed its outlook on the U.S. to “stable” from “negative.”
Since his return to the White House on January 20, President Donald Trump has pledged to balance the U.S. budget while his Treasury Secretary, Scott Bessent, has repeatedly said the current administration aims to lower U.S. government funding costs.
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The administration’s mix of revenue-generating tariffs and spending …