Credit Rating Agency Moody’s Downgraded the Credit Rating of the United States on Friday. The Country Has Lost Its Highest Rating Due to the Expected Higher National Debt and because it has to pay more interest.
Moody’s Has Lowered the Rating From the Highest Level (AAA) to the Second Highest Level (AA1). The Reason is the expectation that the US Budget Deficit Will Rise, from 6.4 percent of the American Economy in 2024 to 9 percent in 2035.
Accordance to moody’s, this is partly because the us has to pay more interest on government debts, has to spend more on social provisions and generates relatively little income. “Successive US Governments and Congress Have Failed to Reach Agreement on Measures to Reverse The Trend of Large Budget Deficits and Rising Interest Charges,” Writes Moody’s.
Due to the Reduction, American Government Bonds Are No Longer Among The Safest Investments, Accordination to Moody’s. This may mean that the American Government can no longer Borrow Money at the most favorable interest rates. Investors are more likely to lend money to governments with the highest rating and at lower interest rates, because your sacrifices more that they will get their money back.
But the second-highest level still sacrifices a lot of reliability, Moody’s Emphasizes. The Credit Rating Agency Points Out That The Size, Resilience and Dynamism of the American Economy Provide for “Exceptional Credit Strengths”.