Moody's downgrade intensifies investor worry about US fiscal path
- Moody's downgraded the United States sovereign credit rating from Aaa to Aa1 last week, signaling concerns over fiscal health.
- The downgrade reflects a sustained increase over more than ten years in the level of federal debt and associated interest costs, which have surpassed those of comparable countries.
- This move has sparked investor worries about fiscal stability and intensified political divisions, with Republicans divided on its significance.
- Moody's described its growth outlook as "very pessimistic" and highlighted the fiscal deficits approaching $2 trillion annually or over 6% of GDP.
- The downgrade raises questions about U.S. Economic management but it is unclear whether it will prompt policy changes amid ongoing debates.
326 Articles
326 Articles
Moody’s reprimands Uncle Sam for squandering Hamilton’s vision
America’s debt-addicted government just lost its triple-A credit rating from Moody’s, as it previously had from fellow rating agencies S&P and Fitch. Many in Washington shrugged the move off as minor or as unfair treatment of the Trump administration. The truth is more sobering: a flashing red signal that the United States is no longer seen as a “perfect” credit risk and that politicians should stop pretending economic growth alone can bail us o…
The Metamorphosis of US Debt: How Much Is at Stake with the Rebalancing of World Reserves
The 30-year U.S. bond return reached 5% again this Wednesday, a top not listed since 2023 and which came on Monday, in reaction to Moody’s decision to withdraw the maximum financial rating to the sovereign debt of the world’s largest economy. That rating cut has been the last warning for bond investors who were already aware of America’s high public deficit but who now look with new eyes at the country’s sovereign debt. Continue reading
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