Moody's Slaps U.S. with Credit Downgrade, White House Lashes Back
Moody's lowers the United States' top credit ranking
In the wee hours of the night, Moody's Investors Service delivered a bitter blow to the United States, yanking its top credit rating from "Aaa" to "Aa1" and changing the outlook to "stable." The move was spurred by the anticipation that the U.S. fiscal situation would continue its tailspin compared to past times and other high-rated nations. Moody's pointed out that the U.S.'s remarkable economic and financial might may no longer be enough to make up for the slide in fiscal metrics.
Following the financial chop, the White House responded with a blistering retort. Steven Cheung, the White House communications director, went full blast on Moody's economist Mark Zandi on social media, casting him as a political adversary of U.S. President Donald Trump. "No one pays heed to his 'analyses.' He's been wrong more times than a stuck record player," Cheung barraged.
Moody's became the lone major U.S. rating agency to maintain the U.S. in the top tier, also known as the "Triple-A Rating," before this move. Standard & Poor's downgraded the country in 2011, and Fitch did the same in 2023. In November 2023, Moody's altered its outlook for the U.S. to "negative" from "stable," hinting at a potential downgrade in the near future. Lower ratings could mean higher borrowing costs for countries.
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Moody's explained in a statement published after market close that the downgrade was due to the expectation that U.S. fiscal situations would continue declining relative to past times and other highly-rated states. They noted that the U.S.'s substantial economic and financial strengths might no longer completely offset the decline in fiscal metrics.
Regarding the contentious tariffs put forth by U.S. President Donald Trump, Moody's stated that the Bureau of Economic Analysis (BIP) growth may experience a temporary hiccup as the economy shifts gears. However, "we don't expect the U.S.'s long-term growth to suffer significantly," the agency declared. Moody's also highlighted the "extraordinary strengths" of the U.S., such as "the massive, tenacious, and vibrant nature of its economy and the role of the U.S. dollar as a global reserve currency" during this assessment. While the past months have been marked by "political turbulence," Moody's expects the U.S. to maintain its storied practice of effective monetary policy under the guidance of an independent Federal Reserve.
Sources: ntv.de, mau/rts
- Rating Agencies
- Moody's
- United States
- Fiscal Policy
- Deficit
- Donald Trump
Enrichment Data:Moody's did not downgrade the U.S. credit rating in 2023. The downgrade from "Aaa" to "Aa1" occurred in 2025. The reasons for this downgrade were the sustained increase in federal debt and interest payment ratios, which are significantly higher than those of similarly-rated sovereigns. Additionally, Moody's highlighted that successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs[1][2][3]. In 2023*, Fitch Ratings downgraded the U.S. credit rating from AAA to AA+ in August, but there is no record of Moody's doing so in that year[2].
In the given text, it is mentioned that Moody's downgraded the United States' credit rating and pointed out the declining fiscal situation as the reason. Therefore, two sentences that follow and contain the required words could be:
- The United States' employment policy and community policy are essential in reversing the declining fiscal metrics, as highlighted by the U.S.'s substantial economic and financial strengths mentioned by Moody's.
- The downgrade in the U.S.'s credit rating has implications for the country's finance, business, politics, and general-news sectors due to the potential increase in borrowing costs.
