On Friday, Moody’s credit rating agency downgraded the long-term issuer and unsecured bond rating of the United States from “Aaa” to “Aa1,” reflecting concerns over the ongoing deterioration in U.S. financial indicators. Moody’s also revised the outlook from “Negative” to “Stable.”
اضافة اعلان
Moody’s stated that the one-notch downgrade reflects the significant and sustained increase over more than a decade in U.S. government debt levels and interest payment ratios, which have become notably higher compared to countries with similar ratings.
The agency pointed out that successive U.S. administrations and Congress have failed to reach consensus on effective measures to reverse the trend of large annual fiscal deficits and rising interest costs.
The report emphasized that Moody’s does not believe current fiscal proposals will result in a meaningful long-term reduction in mandatory spending or fiscal deficits. It added that the deficit is expected to increase over the next decade due to rising spending on entitlement programs and stagnant revenues, which will worsen the debt burden and its costs.
Despite the downgrade, the United States retains several exceptional strengths supporting its “Aa1” rating with a “Stable” outlook. Key factors include the size and strength of the U.S. economy, the role of the dollar as the global reserve currency, the effectiveness of monetary policy led by the Federal Reserve, and institutional stability based on the constitutional separation of powers.
— Al-Mamlaka
