In brief
The US has officially lost its perfect 'AAA' credit rating, with Moody's expressing worries about the government's growing debt and inability to manage deficits.
Moody's downgrade reflects the increasing debt and interest burdens on the US government, now rated 'Aa1'. This change follows a trend as other major agencies like Fitch and S&P have also reduced the US's credit ratings in previous years. Moody's has held its highest rating for the US since 1917, but now cites the country's rising debt-to-GDP ratio—which is expected to hit 134% by 2035—as a significant concern. The White House has pushed back, attributing the downgrade to past fiscal mismanagement, while emphasizing the US's strong economic fundamentals like the global role of the US dollar. This news coincides with a setback for Trump’s proposed spending bill in Congress, adding to the mounting challenges surrounding the nation's financial situation. Meanwhile, economic indicators show a shrink in the economy during the last quarter, further spotlighting financial instability in the US.
