High public debt
Rating agency Moody’s classes USA down
Only one of the three leading rating agencies has recently given the USA the top rating as the debtor. Now Moody’s became the sovereign debt too high.
The United States has also lost the top grade for the credit rating at the last major rating agency. Third, the Moody’s agency classified its evaluation for a step from AAA to AA1. The trigger is the high public debt. With the step, it could be a little more expensive for the United States to get money on the capital market about government bonds.
Moody’s pulled the rating with the competitors Fitch and S&P, who had gone down to AA+ in their grades from AAA. Fitch had reduced the rating 2023 – S&P already in 2011.
Outlook “stable” for the US economy
Moody’s argued that the gradation goes back to the increase in the state debt and the costs of their waitress over more than a decade. They have become significantly higher than in other countries with the top rating. One recognizes that the United States is economically and financially strong – but this no longer fully regretted the re -step in state finances.
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Moody’s has a total of 21 rating levels. The United States initially does not have to expect the agency with a further impact: Moody’s put the outlook on “stable”.
Criticism of the downgrading came from the White House. Communication director Steven Cheung attacked the Moody’s economist Mark Zandi as an adversary of President Donald Trump in the online platform X. “Nobody takes his” analyzes “seriously, Cheung wrote. However, Zandi is chief economist of the analysis business of Moody’s operating rating area.
Growing budget deficit expected
The US state budget has an annual deficit of almost two trillion dollars-more than six percent of the gross domestic product. Moody’s assumes that the budget deficit in 2035 will achieve a share of almost nine percent in economic output without a course correction for taxes and government spending.
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US state bonds are one of the few “safe ports” for investors. However, after the announcement of President Donald Trump’s import customs circuit, the return on bonds rose because investors feared negative consequences for the economy and state finances of the United States.
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Source: Stern
I have been working in the news industry for over 6 years, first as a reporter and now as an editor. I have covered politics extensively, and my work has appeared in major newspapers and online news outlets around the world. In addition to my writing, I also contribute regularly to 24 Hours World.
