Trump’s administration has once again downplayed concerns over the US economy. In response to Moody’s ratings, the US credit rating was lowered from AAA to Aa1. Treasury Secretary Scott Bessent said the rankings were a “lagging indicator.” In an interview, Bessent said, “I think that Moody’s is a lagging indicator I think that’s what everyone thinks of credit agencies.” According to him, Biden’s administration is to blame. He said that the downgrade was because of the Biden administration’s spending policies, which they had defended as investments in things like fighting climate change and making sure more people could get health insurance. The US owes $36.22 trillion in debt. It started steadily rising in the 1980s and kept going up during both President Trump’s first term and the government of former President Joe Biden. Government spending fell, and imports increased as firms raced to get goods into the country ahead of tariffs. In fact, according to the Commerce Department, the economy contracted at an annual rate of 0.3%. This was a sharp downturn after growth of 2.4% in the previous quarter. Recession talks resurface Bessent said that the rest of the World doesn’t care. He pointed to Saudi Arabia, UAE, and Qatar. He said that they are bringing money into the US. However, Dems care. They have found another reason to attack Trump’s administration. Brendan Francis Boyle, a member of the US House Committee on the Budget, said, “This downgrade is a direct warning: our fiscal outlook is deteriorating, and House Republicans are determined to make it worse.” He said the US is in a mess because of Trump’s reckless tariffs. In addition, Sen. Chris Murphy criticized Bessent’s comments about the credit downgrade. He said, “I heard the treasury secretary say, ‘Who cares about the downgrading of our credit rating from Moody’s?’ That is a big deal.” According to him, the downgrade means that the US is likely headed for a recession. This translates to higher interest rates for anybody out there who is trying to start a business or buy a home. He added, “These guys are running the economy recklessly because all they care about is the health of the Mar-a-Lago billionaire class.” Moody’s said that by 2035, the government debt will have grown from 98% of GDP last year to about 134% of GDP. However, they said that the US retains exceptional credit strengths such as size, resilience and dynamism and the continued role of the US dollar as the global reserve currency. On the other hand, republicans are using this to show the importance of getting rid of the US deficits. Rep.Ralph Norman of South Carolina insisted on cutting down the budget because of Moody’s ratings. He said, “Moody’s just stripped America of its last AAA credit rating. This is exhibit A for why we need budget hawks in Congress.” After Moody’s DOWNGRADES the United States’ credit rating from Aaa to Aa1 – the first U.S. credit downgrade in the agency’s history – the Trump Distraction Machine works the overnight shift. pic.twitter.com/00HdipW46g — Greta (@GretaGrace20) May 19, 2025 Meanwhile, Trump has not shown concern. He is, rather, speaking on investigating candidates’ endorsements in connection to Bruce Springsteen, who reportedly branded the Trump administration corrupt, incompetent, and treasonous. Moody’s rankings will not have a lasting impact on the markets The markets have responded to Moody’s downgrade differently. Dow E-minis were down 0.61%. S&P 500 E-minis were down 1.05%, and Nasdaq 100 was down 1.42%. At the same time, yields on U.S. government bonds went up slightly. The 10-year note’s yield rose 10.9 basis points to 4.54%, and the 30-year note’s yield reached 5.02%. Technology stocks are worth a lot, but they lost value before the market opened because rising rates make future gains less valuable now. With a drop of 3.4%, Tesla had the biggest drop of all the megacap and growth stocks. Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot
