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Moody’s Downgrades U.S. Credit Rating Amid Rising Debt Concerns

On May 16, 2025, Moody’s Ratings downgraded the United States’ long-term credit rating from Aaa to Aa1, citing concerns over the nation’s escalating debt and persistent fiscal deficits. This marks the first time since 1919 that Moody’s has lowered the U.S. credit rating.
The downgrade reflects worries about the government’s ability to manage its growing $36 trillion debt, with projections indicating that federal deficits could rise to nearly 9% of GDP by 2035. Interest payments are also expected to consume a larger portion of government revenue, potentially reaching 30% by 2035.
The decision has led to increased volatility in global markets, with U.S. stock futures and the dollar experiencing declines. The downgrade underscores the urgency for policymakers to address the nation’s fiscal challenges.

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