Credit Rating Agency Moody’s Has Downgraded the Credit Rating of the United States. The Country had The Highest Rating But Has Now Lost It 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, spend more on social provisions, and generate relatively little income. “Successive US Administrations and Congress Have Failed to Reach Agreement on Measures to Reverse The Trend of Large Budget Deficits and Rising Interest Charges,” Moody’s Writes.
Due to the Reduction, American Government Loans, Accordance to Moody’s, Are No Longer Among The Safest Investments. This may lead to the US Government No Longer Being Able to Borrow Money At The Most Favorable Interest Rates. Investors Lend Money More Easily and at Lower Interest Rates to Governments with the Highest Rating because sacrumes More Certainty 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 Dynamics of the American Economy Provide for “Exceptional Credit Strengths.”
Government trump Insinuates Political Motives at Moody’s
The American Government Criticized Moody’s New Assessment. Steven Cheung, A Spokesman for President Donald Trump, called economist Mark Zondi or Moody’s a political opponent or Trump. “Nobody Takes His Analysis SeriOutly. He Has Been Wrong Time And Time Again,” Cheung Claimed in A Message on Social Media.
Moody’s is the Last of the Three Major Credit Rating Agencies to Lower the US Credit Rating. In 2011, Standard & Poor’s Already Scrapped the Highest Credit Rating, and in 2023, Fitch Did the Same.