Moody’s downgrades U.S. credit rating to Aa1 over rising debt concerns

WASHINGTON, May 17 (Saudi Arabia Breaking News) – Moody’s Investors Service has downgraded the sovereign credit rating of the United States from its top-tier Aaa rating to Aa1, citing escalating government debt levels and increased costs of refinancing amid elevated interest rates.

The decision, announced Friday, makes Moody’s the last of the three major credit agencies to lower the U.S. sovereign rating in recent years, following similar moves by Standard & Poor’s in 2011 and Fitch Ratings in 2023.

In its statement, Moody’s said the downgrade reflects “a steady deterioration in U.S. fiscal strength,” as the federal government continues to run persistent budget deficits while facing growing debt-servicing costs. The agency highlighted that tax cuts and rising expenditures over the past decade have strained long-term fiscal sustainability.

“While we recognize the United States' significant economic and financial strengths, we believe these no longer fully counterbalance the decline in fiscal metrics,” the agency said.

The downgrade may lead to higher borrowing costs for the U.S. government, as a lower rating implies increased risk in the eyes of investors. It also comes amid rising political polarization over federal budget issues and repeated standoffs over the U.S. debt ceiling.