{"id":12667,"date":"2025-03-30T12:17:20","date_gmt":"2025-03-30T12:17:20","guid":{"rendered":"https:\/\/finderica.com\/?p=12667"},"modified":"2025-03-30T12:17:20","modified_gmt":"2025-03-30T12:17:20","slug":"moodys-last-credit-rater-giving-u-s-top-marks-turns-negative","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=12667","title":{"rendered":"Moody\u2019s, Last Credit Rater Giving U.S. Top Marks, Turns Negative"},"content":{"rendered":"\n
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<\/p>\n

Current national debt as of 28-March-2025<\/p>\n

<\/fbs-accordion>U.S. Department of the Treasury<\/small><\/figcaption><\/figure>\n

The U.S. economy, not about to collapse, is also far from stable, strong, and worry-free, as various indicators and signs have shown. Now it\u2019s time to add another.<\/p>\n

Moody\u2019s Investors Service, while currently maintaining the top credit rating of the country, has changed its outlook to negative. Moody\u2019s is the last of the major credit rating agencies to keep the U.S. at its highest possible position.<\/p>\n

Previous Downgrades<\/p>\n

The first time the U.S. got a rating below AAA (or other variations like Aaa) was in August 2011. Standard & Poor\u2019s downgraded the U.S.<\/a> to AA+ after having put the country on a credit watch in July, CNN reported at the time. To avoid a downgrade, S&P had wanted to see the debt ceiling raised (which affects previous spending, not future) and a \u201ccredible\u201d plan to deal with the long-term debt.<\/p>\n

Fitch Ratings downgraded U.S. debt<\/a> from AAA to AA+ in August 2023, according to CNN. The change happened after a last-minute agreement to raise the debt ceiling, citing \u201ca steady deterioration in standards of governance.\u201d Fitch cited the January 6th insurrection as a significant concern.<\/p>\n

Other Troubling Signs<\/p>\n

Recent events and circumstances suggest the U.S. still hasn\u2019t learned to deal effectively with its financial problems. Unpredictable tariff disruptions are jarring markets. Inflation remains too high, and the most recent Core Personal Consumption Expenditures measure of inflation \u2014 the Federal Reserve\u2019s preferred metric \u2014 came in unexpectedly hot on Friday, March 28. The Fed has cut its GDP growth projections.<\/p>\n

The labor market shows strain, although unemployment remains relatively low. The nonpartisan Congressional Budget Office\u2019s most optimistic projection of budget deficits shows the public debt growing from its current $36.2 trillion to $57.3 trillion by 2034, assuming additional problems don\u2019t worsen it. Trump\u2019s DOGE squad, which is supposed to cut the debt, spends a lot of time looking at cutting workers when they represent less than 5% of the spending compared to corporations, in which labor costs run 50% to 60%.<\/p>\n

There is still no agreement on a final budget nor on a debt limit. Treasury Secretary Scott Bessent wrote Congress on March 14 to make clear that the government was using so-called extraordinary measures<\/a> to keep working capital available. The Bipartisan Policy Center projected<\/a> that between mid-July and early October, the Treasury would \u201cno longer be able to meet its financial obligations in full and on time,\u201d meaning the U.S. would go into default.<\/p>\n

Moody\u2019s Latest Take<\/p>\n

Moody\u2019s latest view<\/a> is that the nation\u2019s \u201cformidable credit strengths continue to preserve the sovereign\u2019s credit profile,\u201d and that \u201cthe downside risks \u2026 may no longer be fully offset by the sovereign\u2019s unique credit strengths.\u201d<\/p>\n

The credit issues all come down to debt affordability. The U.S. has a strong currency, favored status as the largest global reserve currency, and a continued appetite around the world for buying debt in the form of Treasury bills, notes, and bonds.<\/p>\n

But every question increases investor worry. If another downgrade happened, that could nudge investors toward demanding higher yields for a risk premium on Treasurys, in turn making debt service more expensive and worsening the overall fiscal picture.<\/p>\n

Moody’s expects the country\u2019s deficits to remain huge and, as a result, expensive. \u201cContinued political polarization within U.S. Congress raises the risk that successive governments will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability,\u201d they wrote.<\/p>\n<\/div>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Current national debt as of 28-March-2025 U.S. Department of the Treasury The U.S. economy, not about to collapse, is also far from stable, strong, and worry-free, as various indicators and signs have shown. Now it\u2019s time to add another. Moody\u2019s Investors Service, while currently maintaining the top credit rating of the country, has changed its<\/p>\n","protected":false},"author":1,"featured_media":12668,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[238,1692,5252,5250,4285,5251,536,2341,272],"class_list":{"0":"post-12667","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-credit","9":"tag-giving","10":"tag-marks","11":"tag-moodys","12":"tag-negative","13":"tag-rater","14":"tag-top","15":"tag-turns","16":"tag-u-s"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/12667","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12667"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/12667\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/12668"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12667"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12667"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12667"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}