Moody’s Strips from the first-class credit rating

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Moody’s has stripped the United States of its tripartite credit classification, warning of high levels of government debt and budget deficit in the world’s largest economy.

On Friday afternoon, the agency reduced its credit rating on the United States by one to AA1 of AAA, while its outlook was changed to a stable negativity. Fitch and S&P, other major agencies, have already removed the virgin United States classification.

This step comes by MOODY at a time when investors grow increasingly over the financial path of the United States. President Donald Trump’s Republican Party continues budget The draft law, which is widely expected to significantly increases debt over the next decade.

While we realize the importance of the United States economic Moody’s said on Friday afternoon:

Moodyz said that the federal deficit is expected to accommodate about 9 percent of GDP by 2035, an increase of 6.4 percent last year, due to the increase in debt interest payments, spending on result rights and “relatively low revenue generation”.

The agency wrote: “This one -degree reduction reflects the rating scale, which is 21 fame, the increase, which exceeds a decade in government debt rates and pay benefits to much higher levels of sovereign classes,” the agency wrote.

For the first time in history, the United States does not maintain a tripartite credit classification-from at least one of the three major agencies. S & P In 2011 He was the first to strip a country of its virgin classification, while Fitch took this step In 2023.

“The reduction of MOODY prices is” the last examination of the reality on an increasingly dark diagnosis of US government debt management. ”

Yadaf added: “Although it is not surprising … it is however, it is somewhat brutal evading a tense market otherwise and reprimanding the politicians to focus urgently on the necessary reforms to ensure that we maintain American credit as a basic origin free of risk.”

The return on US government bonds has increased in response to the news, as it achieved the normative treasury for 10 years 0.05 percent per day to 4.49 percent. Bond revenues rise with low prices.

“The biggest problem now is not the definitions, which is the lack of progress in the deficit talks in the capital,” said Andy Brender, president of Natalliance Securities, referring to Trump’s duties on commercial partners. He added that reducing the classification was “pressure on the cabinet.”

The budget and republican tax bill failed to transfer it in the House of Representatives on Friday after a Trump faction in Congress argued that the legislation will add a lot to the federal deficit.

It is called the “Great Great Law” by the President, and the proposed legislation will extend the tax cuts of Trump’s 2017, which was scheduled to be expired this year, adding 4.2 trillion expected over the next decade. It will also make 663 billion dollars of new discounts, while seeking to raise nearly one dollar by eliminating some tax credits and increasing some taxes.

The administration believes that tax cuts will increase growth, increase revenues and reduce the United States deficit.

The responsible federal budget projects committee can add the tax law up to 5.2 trillion to the national debt over a period of 10 years. The national debt is currently 29 million dollars.

Trump’s commercial plans and tax cutting plans have developed warnings from the prominent Federal Reserve and Economists about their impact on the American economy, while his administration has struggled to reassure the bond market.

“This reduction is the culmination of many years of financial mismanagement, including but in no way not only to the Trump administration,” said Stephen Gray, chief investment employee at Gray Value Management.

“This reflects a negative point of view on America’s ability to address its financial position,” said Ann Routland, a former analyst in Moody’s who is now the CEO CEO Creditspectrum.

“This decision was a long time to come and it is a terrible warning.”