Moody's Slap to Uncle Sam: Downgrading U.S. Credit Rating, White House Gives a Stern Reaction
U.S. Loses AAA Credit Rating, Now Rated by Moody's as Aa1
Moody's Investors Service ain't playin' no more. This badass rating agency lowered the U.S. credit rating from the prestigious "Aaa" down to "Aa1" on May 16, 2025. The outrageous statement dropped in the evening, strippin' our country of its top-notch status. They gave us a stable outlook, but who needs that, right?
Moody's claims they downgraded us due to our appalling fiscal situation that's gonna get worse than a frat house on graduation night compared to other rock-solid financially sound countries. The significant economic and financial strengths of the U.S. may not be able to compensate for the decline in fiscal metrics.
The White House responded with a ballsy reaction, sharpening their claws and goin' all-out on social media. Steven Cheung, the White House's comms director, took a personal swipe at Moody's economist Mark Zandi, callin' him a political opponent of U.S. President Donald Trump. Cheung declared, "No one takes his analyses seriously. He's been wrong time and again."
Moody's was the only major U.S. rating agency holdin' out on us, reminiscent of a stubborn ex. Standard & Poor's dropped their "Triple-A Rating" in 2011, while Fitch did so way back in 2023. Moody's had already warned us back in November 2023 that a downgrade was comin' with a negative outlook.
Lower ratings can make it harder for countries like us to borrow funds, especially when you have a long list of bills to pay.
Politics: No Majority in Committee, Five Republicans Block Trump's Tax PlansOther keys points Moody's mentioned were the unwillingness of successive U.S. administrations and Congress to address the lack of action in tackling large annual budget deficits and rising interest costs. They also predicted that the federal debt-to-GDP ratio would rise to about 134 percent by 2035, up from 98 percent in 2024.
Regarding the heated tariffs imposed by President Trump, Moody's noted that there might be a temporary slowdown in the economy, but long-term U.S. growth won't be affected. They also praised the U.S. for its "exceptional strengths," such as its impressive economy, the mighty role of the U.S. dollar as a global reserve currency, and the effectiveness of the independent Federal Reserve. Despite some recent political uncertainties, Moody's anticipates the U.S. to continue its historic tradition of solid monetary policy.
Economy: Cutting Jobs at the Fed, Pressure from U.S. Government
Sources: ntv.de, mau/rts
- Rating Agencies
- Moody's
- United States
- Fiscal Policy
- Deficit
- Donald Trump
- The downgrading of the U.S. credit rating by Moody's Investors Service could potentially hinder the country's ability to borrow funds, especially considering the large annual budget deficits and rising interest costs that Moody's has highlighted as areas of concern in their employment policy analysis.
- The White House's sharp reaction to Moody's downgrade, which involved criticizing a Moody's economist on social media, signals a heated political environment surrounding the U.S. fiscal policy, business, and general-news, as the administration's tax plans face opposition in committee.
