WASHINGTON, 17th May, 2025 (WAM) -- Ratings firm Moody's on Friday downgraded the United States' sovereign credit rating from the highest level, triple A, to "Aa1" due to concerns over the country's rising debt.
Moody's, one of three major credit rating agencies and the last one to downgrade the US, cited a steady increase in government debt and the rising cost of refinancing existing debt amid higher interest rates.
According to Moody's, the US has been running budget deficits as spending has increased, while tax cuts have reduced government revenues over more than a decade.
"While we recognise the US' significant economic and financial strengths, we believe these no longer fully counterbalance the decline in fiscal metrics," the ratings firm said in a statement.
A lower credit rating indicates a greater risk that a country might fail to repay its debt and typically leads to higher borrowing costs.