Moody’s Downgrades US’s Perfect Credit Rating, Cites Rising Debt

Moody’s, the influential American financial services company, has downgraded the US’s perfect credit rating, citing rising debt as a main reason.

The Details: Moody’s lowered the US’s rating from AAA to Aa1, and placed blame on “successive [presidential] administrations,” but said 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.” It also changed the US’s outlook from “negative” to “stable.”

For Context: The US retained its perfect rating from Moody’s since 1917, but was warned by the firm in 2023 that it was facing the risk of a downgrade. Fitch Ratings downgraded the US in 2023, and S&P did so in 2011. Other sovereigns such as Canada, Australia, and Germany have perfect ratings from Moody’s. The United Kingdom is two ratings below the US, with an Aa3, and China is three ratings behind the US at A1.

Key Quotes: Moody’s said the downgrade “reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.” The White House responded with a statement, saying it has been “focused on fixing Biden's mess,” and spokesman Kush Desai said, “If Moody's had any credibility… they would not have stayed silent as the fiscal disaster of the past four years unfolded.”

How The Media Covered It: Politico (Lean Left bias) opened its article by calling the adjustment “a blow to the Trump administration.” BBC News (Center) and Fox Business (Lean Right) included that the downgrade came as Trump’s “big, beautiful bill” failed to clear Congress.

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