The United States has also lost the highest grade for creditworthiness at the last large rating agency. Moody has classified the United States from AAA to AA1 and justified this with the high government debt. Fitch and S&P had already reduced the ranking.
With the new step it can be slightly more expensive for the United States to get money on the capital market through government bonds. Moody’s claimed that the gradation goes back to the increased government debt. They have become considerably higher than in other countries with the top classification. The rating agency has a total of 21 phases. With the downgrading, the United States has the best creditworthiness without a large rating agency for the first time in more than 100 years.
AA1 is the next lower assessment level. The benchmark for the amount of creditworthiness is always the amount of the probability that the debtor does not meet his claims or cannot meet. The A categories are all associated with a high level of security in capital repayment and a low risk for investors.
Outlook “Stable”
Because the prospects are “stable”, the United States currently does not have to expect any further gradation. The American state budget has an annual shortage of nearly two trillion American dollars, which corresponds to more than six percent of the gross domestic product (GDP). Moody’s assumes that by 2035 the budget deficit will reach a share of almost nine percent without a course correction by 2035.
US President Donald Trump spoke several times that the shortage had to be reduced, but the earlier savings among Musk’s director missed the promised level.
The White House also criticized it downgrading. “Nobody takes his ‘analyzes’ seriously,” wrote communication director Steven Cheung, referring to Moody’s economist Mark Zandi. The planned draft law to expand tax cuts will increase economic growth, and GDP will increase more than the debts, the American Minister of Finance Scott Bessent noted.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
