The United States lost its last triple-A credit rating from a major agency Friday as Moody’s announced a downgrade, citing rising levels of government debt and dealing a blow to Donald Trump’s narrative of economic strength and prosperity.
The downgrade to Aa1 from Aaa adds to the bad news for the US president, coming on the same day his flagship spending bill failed to pass a key vote in Congress due to opposition from several Republican fiscal hawks.
Explaining its decision, the ratings agency noted “the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.” Moody’s warned it expects federal deficits to widen to almost nine percent of economic output by 2035, up from 6.4 percent last year, “driven mainly by increased interest payments on debt, rising entitlement spending, and relatively low revenue generation.”