Moody’s Strips US of Final AAA Rating Over Rising Debt, Interest Costs

In its downgrade decision, Moody’s cites mounting debt and skepticism over deficit reduction.

Signage is seen outside the Moody's Corporation headquarters in Manhattan, N.Y., on Nov. 12, 2021. Andrew Kelly/File Photo/Reuters

Moody’s Ratings has downgraded the United States’ long-term credit rating from Aaa to Aa1, stripping the nation of its last perfect rating among the three major agencies, citing sustained rising debt, ballooning interest payments, and a lack of political will to rein in chronic budget deficits.

In its May 16 decision, Moody’s pointed to a steady deterioration in fiscal fundamentals across multiple administrations, noting that it does not expect current policy proposals to produce meaningful deficit reduction in the years ahead.