US Credit Rating Downgraded as Debt Concerns Mount

Fri Jul 11 2025 14:05:42 GMT+0300 (Eastern European Summer Time)
US Credit Rating Downgraded as Debt Concerns Mount

The United States has experienced a downgrade in its credit rating from Moody's, signaling increasing concerns over debt repayment capabilities.


Moody's has lowered the US credit rating from 'AAA' to 'Aa1', marking the loss of its last perfect rating. This decision highlights the growing concerns about government debt and interest payments, with suggestions that the economic landscape is deteriorating under successive administrations. Responses from the White House and the implications of the downgrade are discussed.


The US has officially lost its last perfect credit rating, following a downgrade from the credit ratings giant Moody's, which expressed growing concerns regarding the government's ability to meet its debt obligations. The downgrade from 'AAA' to 'Aa1' marks a significant shift, as Moody's previously maintained the top rating for the US since 1917.

In its assessment, Moody's highlighted the persistent surge in government deficits and the rising costs associated with interest payments, stating that these financial metrics have reached levels significantly higher than those of similarly rated sovereign nations. The 'AAA' rating is indicative of a country’s premium credit reliability, symbolizing strong financial health and an exceptional capacity to repay debts.

The downgrade has drawn political reactions, with the White House critically remarking on Moody's credibility. In a statement, spokesperson Kush Desai pointedly argued that had Moody's been reliable, it would have spoken out sooner about the fiscal challenges developing over the past few years. This statement underscores the tension between the current administration and financial analysts, as the Biden administration works to address what it terms a "mess".

A lower credit rating typically signals a higher likelihood of default on sovereign debt and usually leads to increased borrowing costs for the country involved. However, Moody's maintained that the US still possesses significant credit strengths, including a robust economy and the dollar's status as the global reserve currency.

The firm predicted that the federal debt could soar to approximately 134% of Gross Domestic Product (GDP) by 2035, which raises further alarms about economic sustainability. GDP, representing the total economic output of a nation, serves as a benchmark for assessing overall financial health.

This downgrade arrives concurrently with political hurdles facing President Trump's proposed "big, beautiful" spending bill, which was thwarted in a recent vote by the House Budget Committee, further complicating the economic landscape. The economy also faced setbacks, having contracted at an annual rate of 0.3% in the first quarter of the year, attributed to falling government spending amidst rising import levels ahead of tariff implementations.

As the nation grapples with these financial challenges, the implications of the credit rating downgrade will reverberate through both political and economic spheres, influencing policy decisions and market perceptions moving forward.

MORE ON THEME

Fri, 11 Jul 2025 10:50:45 GMT

Turmoil in Trade: President Trump's Tariff Strategy Leaves Global Partners in Flux

Fri, 11 Jul 2025 10:50:45 GMT
Fri, 11 Jul 2025 10:46:30 GMT

Trump Raises Tariff Threat Against Canada Amid Trade Negotiations

Fri, 11 Jul 2025 10:46:30 GMT
Fri, 11 Jul 2025 10:13:59 GMT

### Title: Israeli Intelligence Claims Iran May Retrieve Enriched Uranium Post-US Air Strike

Fri, 11 Jul 2025 10:13:59 GMT
Fri, 11 Jul 2025 09:28:23 GMT

Trump Imposes Tariffs on Brazil Amid Political Tensions Surrounding Bolsonaro

Fri, 11 Jul 2025 09:28:23 GMT
Fri, 11 Jul 2025 04:28:36 GMT

Asia Faces Uncertainty Amid Extended Tariff Negotiations with the U.S.

Fri, 11 Jul 2025 04:28:36 GMT
Fri, 11 Jul 2025 03:13:22 GMT

Judge Halts Trump's Birthright Citizenship Executive Order Amid Legal Challenges

Fri, 11 Jul 2025 03:13:22 GMT
Fri, 11 Jul 2025 03:11:27 GMT

**Asia Faces Uncertainty Amidst Trump's New Tariff Threats**

Fri, 11 Jul 2025 03:11:27 GMT
Fri, 11 Jul 2025 03:09:42 GMT

Trump Proposes 35% Tariffs on Canadian Goods Amid Trade Negotiations

Fri, 11 Jul 2025 03:09:42 GMT
Thu, 10 Jul 2025 21:48:03 GMT

**Judge Halts Trump's Birthright Citizenship Executive Order Amid Ongoing Legal Battles**

Thu, 10 Jul 2025 21:48:03 GMT
Thu, 10 Jul 2025 20:40:18 GMT

**Trump's Tariff Threats: A Political Weapon Aimed at Brazil**

Thu, 10 Jul 2025 20:40:18 GMT
Thu, 10 Jul 2025 19:01:30 GMT

Understanding Liberia: Six Key Insights Following Trump's Praise for President Boakai's English

Thu, 10 Jul 2025 19:01:30 GMT
Thu, 10 Jul 2025 18:59:20 GMT

### Trump’s Tariff Threat Against Brazil: Implications for Bolsonaro and Lula

Thu, 10 Jul 2025 18:59:20 GMT
Thu, 10 Jul 2025 18:56:03 GMT

U.S.-Brazil Relations Strain as Trade War Looms Over Political Discord

Thu, 10 Jul 2025 18:56:03 GMT
Thu, 10 Jul 2025 14:09:38 GMT

Trump's 50% Tariff Threat on Brazil Sparks Backlash

Thu, 10 Jul 2025 14:09:38 GMT
Thu, 10 Jul 2025 10:43:28 GMT

Trump Changes Tune on Ukraine Sanctions Amid European Pressure

Thu, 10 Jul 2025 10:43:28 GMT
Thu, 10 Jul 2025 10:09:49 GMT

Secret Service Personnel Suspended Following Trump Rally Assassination Attempt

Thu, 10 Jul 2025 10:09:49 GMT
Thu, 10 Jul 2025 09:32:24 GMT

The Bilateral Bargain: El Salvador's Gains from U.S. Deportation Strategy

Thu, 10 Jul 2025 09:32:24 GMT
Thu, 10 Jul 2025 09:28:16 GMT

Russian Strikes Intensify in Kyiv as U.S.-Russia Diplomacy Looms

Thu, 10 Jul 2025 09:28:16 GMT
Thu, 10 Jul 2025 05:11:59 GMT

Escalation of Hostilities: Russia's Record Drone Attack on Ukraine

Thu, 10 Jul 2025 05:11:59 GMT
Thu, 10 Jul 2025 00:23:07 GMT

**Rubio's Diplomatic Mission in Asia Amid Trade War Tensions**

Thu, 10 Jul 2025 00:23:07 GMT

Follow us

© 2024 SwissX REDD UK ltd. All Rights Reserved.