Worthy Christian News > US News > U.S. Credit Rating Downgraded to ‘Negative’ Amid Soaring National Debt

U.S. Credit Rating Downgraded to ‘Negative’ Amid Soaring National Debt

by Emmitt Barry, Worthy News Correspondent

(Worthy News) – Moody’s Investor Service changed its assessment of the U.S. credit rating from stable to negative, citing the ballooning national debt as an underlying factor.

Moody’s, a prominent global credit rating provider, maintained the U.S. at AAA credit rating, its highest rating. While not a complete downgrade, the lowered outlook suggests the possibility of a dip in the rating down the road.

“In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues,” Moody’s said in a statement. “Moody’s expects that the U.S.’ fiscal deficits will remain very large, significantly weakening debt affordability.”

This announcement follows Fitch, another credit rating firm, downgraded the U.S. credit rating from AAA to AA+ this past August.

Earlier this week, Bank of America issued a memorandum detailing the excess of the U.S. debt, which currently stands at $33.6 trillion. It is projected to surge by $20 trillion, reaching $54 trillion in the next decade, driven by what Bank of America investment strategist Michael Hartnett describes as “fiscal excess in the 2020s.”

Higher Interest Rates

Experts caution that credit downgrades could trigger a ripple effect across the U.S. economy.

A downgrade in the credit rating of the U.S. may lead to increased interest rates across various sectors, impacting mortgages and credit cards. Economists caution that this could further exacerbate existing inflationary pressures, posing potential catastrophic consequences for the U.S. economy.

The White House tried to shift blame of the state of the U.S. Credit rating’s outlook on Republicans.

“Moody’s decision to change the U.S. outlook is yet another consequence of congressional Republican extremism and dysfunction,” White House Press Secretary Karine Jean-Pierre said.

Republicans, on the other hand, blamed Democrats, with House Speaker Mike Johnson (R-La.) calling the downgrade by Moody’s just “the latest example of the failure of President Biden and Democrats’ reckless spending agenda.”

Next week, Congress will make another attempt to negotiate a solution to the looming government shutdown.