Moody’s downgrades US credit rating after a century
According to the International Economics Desk of Webangah News Agency, citing CNN via Tasnim News Agency, Moody’s downgraded the U.S. credit rating on Friday, marking the first time in 108 years that America has lost its highest credit standing.
This move could destabilize U.S. financial markets and drive up interest rates, further burdening households already struggling with tariffs and inflation.
Among the three major international rating agencies, Moody’s was the last to maintain a pristine AAA rating for U.S. debt—a status unchanged since 1917.
Following Fitch and S&P (which downgraded the U.S. in 2023 and 2011, respectively), Moody’s has now lowered America’s credit rating by one notch to Aa1.
The agency cited “decades-long fiscal deterioration,” including rising goverment debt-to-GDP ratios and interest payments far exceeding peer nations, as key reasons for the downgrade.
Moody’s also warned that future fiscal pressures could intensify as U.S. funding needs grow.
The White House responded sharply on Friday, with spokesperson karine Jean-Pierre stating: “The Biden administration is committed to reversing Republican-driven chaos by cutting waste, corruption, and abuse—passing historic legislation to restore stability.” She added: “If Moody’s had credibility, it wouldn’t have stayed silent during four years of prior mismanagement.”
A treasury Department spokesperson declined CNN’s request for comment.
The downgrade follows warnings from Moody’s since November 2022 about political risks—including near-default crises last summer, Kevin McCarthy’s unprecedented ouster as House Speaker, and Congress’ weeks-long failure to appoint a successor—that eroded confidence in governance.
Market Impact
- Higher Treasury yields expected as investors demand greater returns for perceived risk
- Rising borrowing costs may affect mortgages globally (10-year Treasuries benchmark key loan rates)
