Moody’s reduced the qualification of the United States to AA1 due to the sustained increase in fiscal deficit and public debt. For the first time since 1917, the country no longer has the maximum note of any of the three main agencies.
The Moody’s qualifying agency reduced the United States credit qualification, which thus loses its last triple a Among the three major international agencies. The decision was based on the Structural fiscal deterioration of the country, motivated by sustained debt increases and chronic budgetary deficits.
Moody’s adjusted the country’s sovereign qualification to Aa1breaking with more than a century of perfect history: since 1917, the United States maintained the maximum note in the agency’s records.
The reduction reflects a growing skepticism about the ability of Congress and the White House to reverse the fiscal course. According to Moody’s, the successive administrations They did not achieve lasting agreements to contain spending or increase income effectively. The qualifier warned that federal deficits could reach almost the 9% of GDP in 2035in front of the 6.4% projected for this year.
Among the factors that press on public finances are growing weight of interest paymentsthe increase in spending on social programs and a Insufficient collection.
With this decision, None of the three main agencies grants the USA the maximum note. Fitch He had already degraded the country’s qualification in 2023 for tax concerns, and Standard & Poor’s He had done it in 2011, during a debt roof crisis.
Moodys in Alta.webp
Moody’s a USA: Structural strengths, but alert signs
Despite the cut, Moody’s stressed that the United States maintains “Exceptional credit strengths”like him size and dynamism of its economyin addition to the role of dollar as world reserve currency.
The agency also supported the actions of the Federal Reserverecognizing the historical effectiveness of its monetary policy and independent leadership of Jerome Powellwho had been the target of criticism by the former president Donald Trump.
Source: Ambito
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