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The US has been stripped of its top-notch triple-a credit rating by Moody’s on concerns about rising levels of government debt.
The agency on Friday afternoon cut its credit rating on the US to Aa1 from Aaa, while its outlook was changed to stable from negative. Fitch and S&P, the other main agencies, had previously removed the US’s pristine rating.
Moody’s said it expected federal deficits to widen to almost 9 per cent of GDP by 2035, up from 6.4 per cent last year, owing to increased interest payments on debt, entitlement spending and “relatively low revenue generation”.
“This one-notch downgrade on our 21-notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns,” the agency wrote.
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