Moody’s has downgraded the United States’ credit rating by one level, shifting from Aaa to Aa1, citing concerns about escalating debt and rising interest payments. This move echoes the actions of other rating agencies, with Fitch Ratings downgrading the US to AA+ from AAA in 2023 and Standard & Poor’s doing so back in 2011. Moody’s forecasts an increase in federal debt, projecting it to reach approximately 134% of GDP by 2035, up from 98% in the previous year. Additionally, the federal deficit is anticipated to grow, potentially expanding to nearly 9% of GDP by 2035 from 6.4% in 2024. This is attributed to increased interest expenses on debt, heightened entitlement spending, and diminished government revenues due to tax cuts. In announcing this on Friday, Moody’s also adjusted its outlook for the US to stable from negative. Meanwhile, Standard & Poor’s maintains a credit rating for the US at AA+ with a stable outlook, and DBRS continues to rate the United States at AAA with a stable outlook.
The material has been provided by InstaForex Company – www.instaforex.com
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