NEW YORK — Moody’s, one of the world’s three largest credit rating agencies, has downgraded the credit rating of the United States to “Aa1” with a stable outlook.

Previously, in 2021, Fitch Ratings had already downgraded the US to "AA+," while S&P had cut its rating back in 2011.

The downgrade by Moody’s was attributed to the ballooning US government debt, which exceeded USD 36 trillion in early 2025.

“This downgrade reflects the increase over more than a decade in government debt and interest payment ratios,” Moody’s stated in an official release on Friday (16/5) local time.

The agency projects that interest payments on federal debt could consume 78% of government spending by 2035, up from 73% in 2024.

The US is also at risk of declining tax revenues if the 2017 Tax Cuts and Jobs Act (TCJA) is extended, compounded by soaring government expenditures.

“As a result, we expect the federal deficits towiden, reaching nearly 9% of GDP by 2035, up from 6.4% in 2024,” Moody’s added.

Moody’s further predicts that the national debt burden will reach 134% of US GDP by 2035, compared to 98% in 2024.

For context, as of 2023, the US GDP stood at USD 27.72 trillion.

Despite the risks, Moody’s upgraded its outlook on the US to stable from negative, citing the country’s resilience in navigating economic shocks, as well as unshakeable dollar.

According to BBC, Moody’s had maintained a perfect “AAA” rating for the US since 1917. However, back in 2023, the agency had already warned that a downgrade was looming. (ZH)