Moody’s Downgrades US Credit Rating from AAA over Rising Debt

Moody's Ratings downgraded the United States' long-term credit rating from Aaa to Aa1, marking the first time in decades that the U.S. has lost its top-tier status. The downgrade reflects growing concerns over rising government debt, increasing interest payments, and widening federal deficits projected to reach nearly 9% of GDP by 2035. Despite the downgrade, Moody's maintained a stable outlook, emphasizing the U.S.'s institutional strength, economic resilience, and the dollar's role as the global reserve currency. The agency highlighted that the risk of acute funding stress remains low due to strong investor demand for U.S. Treasuries but noted that fiscal reforms are necessary to reverse the deteriorating debt situation. Fitch Ratings and S&P Global Ratings have also downgraded the U.S., signaling broader market concerns about the nation's fiscal trajectory. Moody's stressed that the downgrade is not a reflection of diminished confidence in U.S. institutions or monetary policy but rather a response to ongoing fiscal challenges.