Mathias Busekist
It was there, and now it’s gone.
Moody’s Ratings downgraded the United States’ credit rating on Friday, stripping the country of its last remaining AAA status and placing it one notch lower at Aa1.
The move, driven by rising debt levels and growing interest payments, could shake financial markets and raise borrowing costs — a potential blow for consumers already grappling with inflation and economic uncertainty.
Moody’s had maintained a perfect credit rating for the U.S. since 1917, making it the last of the three major credit agencies to do so. Fitch and S&P previously downgraded U.S. debt in 2023 and 2011, respectively, citing fiscal instability and political dysfunction.
In its announcement, Moody’s pointed to more than a decade of increasing debt ratios and projected future borrowing that could further strain the U.S. economy. The downgrade follows a warning issued last November, when the agency highlighted political gridlock — including the near-default in summer 2023 and the historic removal of House Speaker Kevin McCarthy — as signs of deepening governance challenges.
Political reactions were swift. A spokesperson for the Trump campaign blamed the Biden administration for “fiscal disaster” and promised aggressive spending cuts if Republicans regain power. The Treasury Department did not immediately respond.
The U.S. is currently running a $1.8 trillion annual budget deficit, up from $1.3 trillion in 2011. As concerns over long-term fiscal health mount, Moody’s downgrade underscores a broader loss of confidence in the country’s ability to manage its finances amid persistent political turmoil.