Member-only story
Moody’s downgrading raises market concern over the US budgetary future
Moody’s criticized mounting debt, claiming that the United States had consistently failed to reverse its tendency toward substantial annual fiscal deficits and interest payments
Moody’s downgrading of the United States’ sovereign debt has heightened investor concerns about a coming debt time bomb, which may prompt bond market vigilantes to demand more budgetary restraint from Washington.
The ratings agency downgraded America’s perfect sovereign credit rating by one notch on Friday, becoming the latest of the major rating agencies to do so, citing worries over the country’s increasing $36 trillion debt.
The action occurred as Republicans in the House and Senate sought to pass a massive package of tax cuts, spending increases, and safety-net changes that may add trillions to the US debt pile.
The Big Beautiful Bill
Despite restored trade optimism, markets are on edge due to uncertainty regarding the ultimate design of the so-called “Big Beautiful Bill”. Despite President Donald Trump’s call for unity around the measure, the package fell short of a major hurdle on Friday.
