From Yahoo Finance: 2025-03-25 10:02:00

Moody’s warns of continued decline in U.S. fiscal strength due to widening budget deficits and less affordable debt. Debt to GDP ratio projected to rise to 130% by 2035 from nearly 100% in 2025. Interest payments could reach 30% of revenue by 2035. Fitch cut U.S. sovereign rating in 2023.

Investors use credit ratings to assess risk profile. Lower U.S. debt affordability increases importance of dollar and Treasury market. Tariffs and potential tax cuts complicate economic outlook. Moody’s sees challenges in offsetting widening deficits and declining debt affordability. $4.5 trillion tax cut extension proposed by Republicans.

Spending cuts require bipartisan support and may be politically difficult. Department of Government Efficiency led by Elon Musk aims to reduce wasteful spending. Tariffs may offer temporary revenue support but could hinder growth in the long run. Mandatory expenditures overshadow minor spending cuts in generating savings.

Read more: Moody’s says US fiscal strength on course for continued decline