From Yahoo Finance: 2025-05-16 16:49:00

Moody’s downgraded the U.S. sovereign credit rating to “Aa1” due to $36 trillion debt concerns, complicating Trump’s tax cuts. This is the last of three major credit agencies to downgrade. White House criticized the move. Trump’s administration aims to lower government funding costs but has not convinced investors.

Trump is pushing for a bill to extend 2017 tax cuts, adding trillions to debt. The tax bill failed Friday. Moody’s predicts a rise in federal debt to 134% of GDP by 2035. Senate Democratic Leader Schumer calls for an end to deficit-busting tax giveaways.

Investors fear higher borrowing costs due to the downgrade. Long-dated Treasury yields may rise. Trump’s tariffs have increased market uncertainty. Expect a market reaction to the news. The downgrade adds to fiscal irresponsibility, impacting public and private sector borrowing costs.

Read more: Moody’s cuts America’s pristine credit rating, citing rising debt