Moody’s has downgraded the U.S. government’s credit rating from Aaa to Aa1, citing a worsening debt trajectory and political paralysis in Washington.
The move follows similar downgrades by Standard & Poor’s in 2011 and Fitch in 2023.
Moody’s warned that deficits could reach 9% of GDP by 2035, driven by interest payments and rising entitlement costs.
Efforts to curb spending failed as Republicans and Democrats remain divided.
The agency also flagged Trump-era tax cuts as a $4 trillion threat to fiscal health if extended, further straining the federal deficit outlook.
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