Moody’s Signals Potential US Debt Downgrade
Moody’s ratings agency has warned it may downgrade US government debt in 2025, following similar moves by S&P and Fitch who already reduced US ratings from AAA to AA+. Moody’s currently maintains an AAA rating but with a negative outlook since 2023.
The agency is concerned about unchecked federal debt growth (now at 100% of GDP compared to 44% for other AAA-rated nations), rising interest costs, and declining debt affordability.
The situation appears likely to worsen as Congress prepares to pass Trump-backed tax cuts and extensions later this year. The Congressional Budget Office projects debt will reach 119% of GDP in 10 years and 136% in 20 years—and these projections don’t account for the pending tax cuts that could add $4-10 trillion more debt over the next decade.
