Moody's Downgrades U.S. Credit Rating Amid Fiscal Concerns
Moody's downgraded the U.S. credit rating from 'Aaa' to 'Aa1', citing rising debt and interest payments. This marks the end of the U.S.'s era of triple-A ratings by major agencies. The downgrade occurs amid governmental debates on fiscal policies, highlighting concerns over mounting government debt.
On Friday, Moody's downgraded the U.S. credit rating by one notch from 'Aaa' to 'Aa1', due to escalating debt and interest expenses. This move signals the end of an era as the U.S. loses its triple-A distinction from all major rating agencies, prompting concerns over fiscal sustainability.
The decision arises amidst ongoing U.S. Congressional discussions regarding tax and spending plans, which Moody's believes may further exacerbate the fiscal deficit. The downgrade follows similar actions by Fitch, reflecting anticipated fiscal deterioration and protracted debt ceiling negotiations.
The fiscal policies, including President Trump's attempts to extend 2017 tax cuts, are scrutinized for potentially increasing the federal debt without long-term deficit reduction. Market fragility is evident as credit ratings influence borrowing costs; this downgrade could impact both public and private sector financial strategies.
(With inputs from agencies.)
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