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BitcoinSistemi 2025-05-16 22:12:09

Shock for the US: Moody’s Downgrades Credit Rating – Here are the Details

The US has completely lost its highest credit rating, AAA, following the downgrade decision by Moody's, the last of the leading credit rating agencies. Moody's announced that the US credit rating was downgraded to Aa1 due to rising budget deficits and rising interest costs. The organization noted that the US government's widening budget deficits are rapidly increasing the need for borrowing, which is putting upward pressure on interest rates in the long run. It also noted that current budget plans being discussed in Congress are not sufficient to reduce the persistent imbalance between spending and revenues. The move follows similar downgrades by Fitch Ratings in 2023 and S&P Global Ratings in 2011. The U.S. loses its highest credit rating from all three major rating agencies. Its new credit rating is Aa1, a level already shared with countries such as Austria and Finland. “Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of high annual budget deficits and rising interest costs,” Moody's said in a statement. Related News: Why Did the Judge Reject the Settlement in the Ripple-SEC Case? Three Legal Sources Respond The downgrade could add to the pressure on U.S. Treasuries already under pressure from expectations of higher inflation and rising debt, but experts do not expect the downgrade to cause significant market turbulence. Indeed, after the S&P downgrade in 2011, Treasury bonds rose due to the weak economic outlook. The US remains the world's largest economy and a benchmark against which other countries measure their economic reliability. Still, some investors say the latest downgrade could hurt the U.S.'s perception as a global haven of trust, leading global investors to demand higher yields on U.S. bonds. “This could increase the cost of servicing our debt, further widening the budget deficit,” said Michael Goosay, global head of fixed income at Principal Asset Management. *This is not investment advice. Continue Reading: Shock for the US: Moody’s Downgrades Credit Rating – Here are the Details

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