US government debt may come under more pressure this week after the credit ratings agency Moody’s stripped the US of its top-notch triple-A rating.
Moody’s dealt a blow to Washington last Friday, when it downgraded the US and warned about rising levels of government debt and a widening budget deficit. It cut its US credit rating by one notch to AA1, becoming the last of the big three agencies to downgrade the country from a triple-A rating.
The move comes as concerns about the US’s fiscal trajectory have risen. The US national debt now stands at $36tn (£27tn), and economists fear that Donald Trump’s “one big, beautiful bill” – which was blocked by rightwing lawmakers last Friday – could push the deficit higher by cutting taxes.
Explaining its decision, Moody’s said it expected the US budget deficit to keep rising, and criticised US politicians for not taking action to improve the country’s fiscal position.
