Moody’s(US:MCO) Xin Hua Cai Jing·2025-05-19 00:39Core Viewpoint - Moody's downgraded the U.S. sovereign credit rating from AAA to AA1 due to the increasing scale of government debt and interest payments, while adjusting the outlook from "negative" to "stable" [1] Group 1: Credit Rating Changes - Moody's is the latest credit rating agency to downgrade the U.S. credit rating, following Fitch's downgrade to AA+ in August 2023 and S&P's downgrade to AA+ in August 2011 [1] - The downgrades are closely associated with the U.S. debt ceiling approaching the "X date," raising concerns about fiscal stability [1] Group 2: Fiscal Concerns - Moody's expressed concerns about the current fiscal situation and future budget plans, predicting that by 2035, U.S. federal debt will reach 134% of GDP and the federal deficit could rise to 9% of GDP [1][2] - The agency noted that mandatory spending, including interest payments, will increase from 73% of total government spending in 2024 to 78% by 2035, limiting budget flexibility for other public investments [2] Group 3: Current Debt Situation - The total U.S. federal debt has surpassed $36 trillion, with $6.5 trillion in bonds maturing by June 2025 [2] - The fiscal deficit for the first half of FY2025 has already exceeded $1.3 trillion, marking the second-highest level for that period in history [2] Group 4: Political Context - The current fiscal challenges are described as long-term issues rather than short-term problems created by the current administration, with efforts underway to reduce federal spending and promote economic growth [3] - There are concerns regarding the objectivity of credit rating analysts, with political affiliations being questioned, although such claims may serve to divert attention from underlying fiscal issues [3]