Jens Asbjørn Bøgen
The agency is especially concerned with erosion of checks and balances in US policymaking.
A leading European credit ratings agency has cut the United States’ creditworthiness, warning that political instability and growing debt are eroding confidence in the world’s largest economy.
Berlin-based Scope Ratings announced Friday that it had lowered the U.S. credit score from AA to AA-, citing “sustained deterioration in public finances and a weakening of governance standards.”
While the outlook was upgraded from “negative” to “stable,” the agency’s political assessment was notably critical of President Donald Trump’s administration.
“The weakening of governance standards, particularly the erosion of well-established checks and balances, reduces the predictability and stability of U.S. policymaking,” the agency said in a press release, adding that this unpredictability has also affected relations with major trading partners, especially in tariff policy.
Erosion of Checks
Scope expressed alarm over what it described as “the increasing consolidation of power within the executive branch,” warning that the White House has at times defied court rulings and bypassed congressional oversight.
The agency argued that the Trump administration has defied court orders on several occasions, circumvented congressional oversight, and challenged judicial authority — weakening institutional safeguards.
The report from Scope Ratings cited the frequent use of executive orders as an example of this trend, saying Trump’s unilateral policy moves have sidelined Congress.
Scope also pointed to deepening “political polarization” and a “dysfunctional Congress,” which it said were contributing to the country’s ongoing budget stalemate — the second-longest in U.S. history.
Rising Fiscal Strain
The agency’s second major concern centers on America’s financial trajectory.
It warned that the U.S. faces a ballooning debt burden, with interest payments consuming a growing share of federal revenue. Without corrective action, Scope estimated that the debt-to-GDP ratio could reach 140% by 2030.
Trump’s “One Big Beautiful Bill Act,” passed in the summer despite political resistance, was highlighted as a factor behind increased spending commitments that have worsened fiscal pressures.
According to Scope, the only reason the rating was not downgraded further is the enduring strength of the U.S. economy, continued global demand for U.S. Treasury bonds, the dollar’s dominance as the world’s reserve currency, and the credibility of the Federal Reserve.
Pressure on the Fed
Even so, the agency voiced concern about political interference with the U.S. central bank. It warned that the Trump administration’s repeated efforts to push the Federal Reserve to cut interest rates could undermine its independence and its long-term ability to meet the 2% inflation target.
Scope, a relatively young entrant in the credit ratings sector, became the first European agency accepted by the European Central Bank in 2023.
This article is made and published by Jens Asbjørn Bogen, who may have used AI in the preparation
