Even before talk of fresh unfunded tax cuts took center stage in the budget wrangling on Capitol Hill, US bond investors were making their views loud and clear: If the government keeps spending more than it takes in,

Stocks slip and bonds fall more sharply after Moody’s downgrades the US credit rating Copyright 2025 The Associated Press. All Rights Reserved.

It all comes down to money. The credit rating is a guide to how risky buying debt is for potential investors. Independent agencies examine the metrics of a would-be bond seller to assess their creditworthiness and determine how likely that issuer might be to default on their debt.

Moody's becomes latest major credit rating agency to downgrade US' 'perfect' long-term credit rating - Anadolu Ajansı

Years of rising deficits and budget chaos finally caught up with the U.S. credit rating Friday when Moody’s Investor Service downgraded the government, stripping its last triple-A rating.

The 30-year U.S. Treasury yield topped 5% to hit its highest since October 2023 after Moody's on Friday stripped the United States of its AAA sovereign credit rating. It was the last of the three main credit ratings agencies to do so.

After the closing bell on Friday, Moody’s became the last major credit-rating firm to downgrade U.S. sovereign debt from its perfect AAA status to Aa1. The firm argues that the U.S. is on a trajectory to increase entitlement spending—without the necessary government revenues to keep interest payment ratios at levels similar to other sovereign nations.

The downgrade follows a change in the outlook on the sovereign in 2023 due to wider fiscal deficit and higher interest payments, and comes as Congress debates tax and spending plans that could deepen the fiscal hole.