Moody's has joined the other two large rating agencies to determine that the United States is no longer able to hold an AAA credit rating.
Friday, Moody's retrograde The credit rating of America from AAA to AA1 while passing the perspectives of the country from the negative to the stable.
Moody's attributes demotion to national debt and payment of the interests of the United States which exceed those of other countries with the same credit rating.
“As deficits and debt have increased and interest rates have increased, payments of interest on public debt increased considerably.
Without adjustments of taxation and expenses, we expect budgetary flexibility to remain limited, with compulsory expenses, including interest in interest, which should reach around 78% of total expenses by 2035, against around 73% in 2024. If the tax on tax reductions and 2017 jobs is prolonged, which is our basic case, it will add around 4 Dollars at the next federal decade (excluding interest in interest) by the prerequisite for the next decade.
Consequently, we expect federal deficits to widen, reaching almost 9% of GDP by 2035, compared to 6.4% in 2024, mainly driven by an increase in interest payments on debt, increased rights expenditure and relatively low revenue generation. We plan that the burden of federal debt will reach around 134% of GDP by 2035, against 98% in 2024. ”
Moody's latest decision is stripping the United States from his last Triple-A credit rating. The demotion follows previous movements by other major agencies: in 2011, Standard & Poor's (S&P) lowered The USA note from AAA to AA + due to concerns about the government's inability to discuss the increase in debt levels. And in 2023, Fitch followed the plunge, citing Persistent budgetary deficits and political struggles as key engines of its demotion.
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