Moody’s downgraded the US credit rating from Aaa to Aa1, citing concerns over its $36 trillion debt and rising costs, marking the first downgrade since 1949. This decision, following a similar downgrade by Fitch, reflects ongoing fiscal deficits and increased interest payments, with projections indicating the federal debt could reach 134% of GDP by 2035. The Trump administration criticized the downgrade as politically motivated while continuing efforts to pass tax cuts, despite the downgrade raising fears of a reevaluation of US sovereign debt in financial markets.
