17.05.2025 01:50
The international credit rating agency Moody's has downgraded the United States' credit rating from 'Aaa' to 'Aa1'. The agency also changed the outlook on the U.S. credit rating from 'negative' to 'stable'. The statement highlighted concerns about rising fiscal deficits and public debt.
Moody's announced that it has downgraded the credit rating of the United States from "Aaa" to "Aa1" while changing the credit rating outlook from "negative" to "stable".
In a statement from the international credit rating agency Moody's, it was reported that the credit rating of the United States has been revised.
CREDIT RATING DOWNGRADED
The statement indicated that the country's long-term credit rating has been downgraded from "Aaa" to "Aa1", and it was noted that the credit rating outlook has been changed from "negative" to "stable".
The statement mentioned that the downgrade reflects the significant increase in public debt and interest payment ratios over the past 10 years compared to countries with similar ratings.
"LARGER DEFICITS EXPECTED"
The statement pointed out that the U.S. administrations and Congress have not been able to agree on measures to reverse the trend of large annual fiscal deficits and rising interest costs, stating, "We do not believe that the current fiscal proposals under discussion will provide significant long-term reductions in mandatory spending and deficits."
It was expressed that over the next decade, government revenues are expected to remain generally stable, with larger deficits anticipated.
DEBT AND DEFICIT EXPECTED TO RISE
The statement highlighted that the federal debt of the U.S. has sharply increased due to continuous fiscal deficits for over 10 years, emphasizing that while federal spending has increased, tax cuts have reduced government revenues.
It was emphasized that unless adjustments are made in taxation and spending, budget flexibility is expected to remain limited, and it is projected that mandatory spending, which constitutes about 73% of total spending in 2024, will rise to approximately 78% by 2035, including interest expenses. It was noted that if the 2017 tax cuts are extended, the deficit is expected to increase by about $4 trillion over the next 10 years.
WHAT HAPPENED?
Moody's was the last major credit agency to maintain the U.S. credit rating at the Aaa level. Standard & Poor's downgraded the U.S. credit rating to AA+ in 2011, and Fitch did so in 2023.