Moody’s Downgrades US Government’s Top Credit Rating

Moody’s downgraded the US government’s top credit rating from Aaa to Aa1, citing repeated failures by successive administrations to control rising debt and fiscal deficits. Despite changing the outlook to “stable,” Moody’s warned federal deficits could widen to nearly 9% of the economy by 2035 due to higher interest payments, entitlement spending, and low revenue. Extending Trump’s 2017 tax cuts could add $4 trillion to deficits over a decade. The downgrade surprised markets and drew criticism from White House officials, who questioned Moody’s credibility. Moody’s follows Standard & Poor’s (2011) and Fitch (2023) in lowering the US credit rating.