- MOODY reduced American credit rating One fled to AA1 from AAA on Friday evening, which means that the federal religion no longer gets a higher degree in any of the main classification agencies. MOOODY was martyred “the increase that exceeds a decade in government debt rates and pays interest to much higher levels of kings classified.”
The debt explosion in recent years recently reduced the American credit on Friday evening, which means that the federal debt no longer gets a higher degree in any of the main classification agencies.
Moody’s US One Rung was cut to AA1 from AAA, thenThe alarm appeared On the deterioration of the financial situation in March. In November 2023, MOODY lower her view of US debt to negativity, which is often an introduction to the ultimate reduction.
“This first -class reduction on the 21 -year evaluation scale reflects the increase of more than a decade in government debt rates and paying interest to much higher levels of kings classified as well,” The agency said in a statement.
He added: “The successive American 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. We do not believe that the multiple discounts of years in spending and mandatory deficit will result from the current financial proposals under consideration.”
This classification comes at a time when Republican -controlled Congress is trying to extend tax cuts from President Donald Trump’s first term and add new spaces such as ending taxes to advice, additional work and social security income.
While lawmakers are also looking for spending cuts, the total impact of financial proposals in general will add trillion to the budget deficit in the coming years.
This is that the budget deficit has already reached a trillion dollars so far in this fiscal year and reached 2 trillion dollars in the previous financial years. Debate of debt benefits alone is one of the largest spending elements, exceeding the Pentagon budget.
MOODY expects a deficit to nearly 9 % of GDP by 2035 of 6.4 % in 2024, with interest payments on debt and merits increased while revenue remains relatively low. As a result, US debt will rise to 134 % of GDP by 2035 from 98 % in 2024. interest payments are likely to obtain 30 % of revenues by 2035, up from about 18 % in 2024.
Moody’s said on Friday: “During the next decade, we expect a greater deficit as spending in spending is high, while government revenues are still widely flat,” Moody’s said on Friday. “On the other hand, the constant financial deficit will push the burden of government debt and benefits up. It is possible that the financial performance of the United States will deteriorate for its past and compare it to other high -class dictates.”
In the lower classification, Moody’s has put the American view of stability, indicating its strong economy and the role of the dollar as a backup currency. However, the “exorbitant concession” can no longer compensate for the high debt pile.
“While we realize important economic and financial strengths in the United States, we believe that it is no longer a fully balanced balancing in financial standards,” Moody’s added.
The White House did not immediately respond to a request for comment.
Moody’s was the last major classification agencies that gave us the highest sign. Fitch cut the United States by one in 2023, citing financial deterioration and repeated roof improvements. This was followed by a similar discount from Standard & Poor’s in 2011 after a valid roof crisis.
Although the classification was reduced on Friday, Moody’s was also optimistic about the institutions of America – even with its testing – as well as making monetary policies and macroeconomics.
“In particular, we assume that long -term checks and balances between the three branches of the government and respect for the rule of law will remain unchanged on a large scale,” he said. “In addition, we assess that the United States has the ability to control its financial path, even with the development of political decisions from one administration to another.”
This story was originally shown on Fortune.com
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