Moody’s downgraded the U.S. credit rating from AAA to AA1, citing rising national debt exacerbated by tax cuts and continued high spending. This marks the first downgrade by Moody’s since 1919, signaling diminished global investor confidence. While the immediate impact on borrowing is minimal, consumers may experience higher interest rates on loans due to increased lender demands for higher returns. The downgrade reflects a decade of growing federal deficits stemming from reduced government revenue and increased spending.
Read More
Moody’s downgrade of the U.S. credit rating to Aa1 from Aaa sent Treasury yields sharply higher on Monday, with the 30-year yield reaching 5.03%, its highest level since November 2023. This increase, driven by investors selling bonds, saw the 10-year yield climb to 4.513% and the 2-year yield rise to 3.993%. The downgrade cited rising government debt and interest payments as contributing factors, mirroring a similar situation in 2023 when tariffs caused a comparable yield spike. Consequently, stock futures fell significantly.
Read More
Moody’s downgraded the U.S. government’s credit rating from Aaa to Aa1, citing escalating debt and repeated failures to address it across administrations. This makes the U.S. the first to lack a top-tier rating from all three major agencies in over a century, following similar downgrades by S&P and Fitch. Moody’s projects a growing federal deficit, reaching nearly 9 percent of GDP by 2035, fueled by rising interest payments and entitlement costs. The agency also warned that extending the 2017 tax cuts would exacerbate the deficit, highlighting political gridlock as a significant barrier to fiscal reform.
Read More
John Q. Hosedrinker