Moody’s reduces the credit rating to “AA1”

MOODY categories have reduced the sovereign credit rating of the United States AA1 from AAA, which is the highest possible level, indicating the increasing burden to finance the deficit in the federal government budget and the growing cost of rolling on the current debt amid high interest rates.

“This first -class reduction on the rating scale, which is 21 Nov, reflects the increase of more than a decade of government debt rates and paying benefits to much higher levels of kings classified similarly,” the classification agency said in a statement.

It is expected that the decision to reduce the US credit file will be expected to raise the return that the investors demand in order to purchase US Treasury debts to reflect more risks, and can be morale towards possessing American assets, including stocks. However, all major credit rating agencies continue to grant the United States the highest available rating.

Return on the standard Treasury bonds for 10 years 3 basis points in post -hours trading, 4.48 % trading. the Ishaares 20+ Treasury ETF ETF Long -term debt agent – About 1 % decreased in trading after hours, while SPDR S & P 500 ETF TRUST Which tracks the analogy of American stocks decreased by 0.4 %.

Moody’s was a comment in keeping sovereign debt in the highest possible credit rating, and the 116 -year -old agency brings its competitors. Standard & Poor reduced the United States’ classification to AA+ from AAA in August 2011, and Fitch classified the United States classification to AA+ from AAA, in August 2023.

“The successive US departments and Congress have failed to agree on measures to reflect the direction of the large annual financial deficit and the costs of increasing benefits,” Modi analysts said in a statement. “We do not believe that the multiple discounts of the year in spending and mandatory deficit will result from the current financial proposals.”

Huge deficit

The United States manages a large budget deficit as interest costs for cabinet debts continued to rise due to a range of high rates and more major financing debts. The financial deficit in the year that started October 1 is already operating at $ 1.05 trillion, which is 13 % higher than last year. Revenue helped the definitions in shaving some defect last month.

Moods’s Surnger’s reducing at a time when the Republican Party Budget Budget Committee rejected on Friday the package of overwhelming taxes as part of President Donald Trump’s agenda, including the extension of the tax discounts that were enacted in 2017.

MOODY officially classified American bonds in 1993 for the first time, but has allocated a “rural roof classification” for AAA on the United States since 1949.

-With additional reports by Christina Cheter-Berek from CNBC and Skut Chenber