New Delhi: In a shocking development, Moody’s Ratings has stripped the United States of its last top credit rating and lowered the US credit score to Aa1 from Aaa on Friday.
The Moody’s Ratings report indicates the concerns regarding the fiscal challenges faced by the US economy which have been driven by over a decade of rising government debt and interest costs. The ratings highlight weakening debt affordability compared to other highly rated parties.
Earlier, other global rating agencies, Fitch Ratings and S&P Global Ratings, downgraded the world’s biggest economy below the top, triple-A position.
“While we recognize the US’ significant economic and financial strengths, we believe these no longer fully counterbalance the decline in fiscal metrics,” Moody’s wrote in a statement.
In its report, Moody’s blamed the successive governments in the US and Congress for swelling budget deficits.
Moody’s downgraded rating indicates there is a reduced confidence in US creditworthiness, which means rising concerns over the country’s increasing deficits, debt-to-GDP ratios, and political gridlock over debt ceiling and fiscal policy.
“Moreover, the resilience of the US sovereign rating to shocks is supported by strong monetary and macroeconomic policy institutions. Although policy has been less predictable in recent months, relative to what has typically been the case in the US and other highly-rated sovereigns, we expect that monetary and macroeconomic policy effectiveness will remain very strong, preserving macroeconomic and financial stability through business cycles,” Moody’s stated.
Meanwhile, the White House hit out at Moody’s Analytics’ chief economist, Mark Zandi, saying nobody takes him seriously. “Nobody takes his ‘analysis’ seriously. He has been proven wrong time and time again,” Cheung posted on X.
Moody’s downgraded the US credit rating to Aa1 from Aaa, citing rising government debt, increasing interest costs, and political gridlock. Economy Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
