Moody's Downgrades US Economy's AAA Credit Rating, Trump Reacts

new york, usa - Moody's has lowered the US economy's top-notch AAA credit rating for the third time, impacting borrowing costs. President Trump expresses frustration over the downgrade.

Moody's Downgrades US Economy's AAA Credit Rating

Moody's, as the third major credit agency, has downgraded the US economy's prestigious AAA credit rating, affecting its ability to borrow at lower costs. The AAA credit rating signifies the highest creditworthiness for a country, enabling easier access to international markets for borrowing.

Impact of the Downgrade

The recent downgrade by Moody's means that none of the major credit agencies consider the US as having top creditworthiness. Fitch and S&P Global Ratings had already withdrawn the AAA rating in previous years.

Reasons for the Downgrade

Moody's attributed the downgrade to the long-standing trend of significant annual budget deficits and rising interest costs due to the failure of successive US administrations and Congress to agree on measures to address these issues. The current US debt stands at $36.213 trillion.

Response and Future Outlook

The White House strongly reacted to the downgrade, criticizing Moody's credibility and blaming the budget policies under President Biden. Despite the downgrade, Moody's acknowledges the US's exceptional credit strengths, including its robust economy and the status of the dollar as a global reserve currency.

Analysts are cautious about the immediate market impact but anticipate short-term reactions. The US economy experienced a contraction in the first quarter, with a 0.3% decline in economic growth, primarily due to reduced government spending and increased imports ahead of new trade tariffs.

International Comparisons

Countries like Canada, Germany, Switzerland, Denmark, Norway, Sweden, and Australia still maintain their AAA ratings. In contrast, China holds a lower A1 rating from Moody's.