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Moody’s Investors Service downgraded the United States’ credit rating on Friday, dropping it one notch from its top-tier Aaa status to Aa1, citing the nation’s mounting debt burden and escalating interest payments that have accumulated over years.

The ratings agency pointed to a concerning trend that has developed over more than a decade. “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 stated in its announcement.

Despite the downgrade, Moody’s revised the U.S. outlook from negative to stable, suggesting that while the agency sees long-term fiscal challenges, it does not anticipate further deterioration in the immediate future.

This marks a significant moment for the world’s largest economy, which has historically maintained the highest credit rating from major agencies. The downgrade could potentially affect borrowing costs for the federal government and impact global financial markets that rely on U.S. Treasury securities as benchmark safe assets.

The decision follows years of ballooning federal deficits and comes as Washington continues to face challenges in addressing its fiscal imbalances. The U.S. national debt currently stands at over $36 trillion, having more than doubled over the past decade.

May 17, 2025 12:20 AM GMT+03:00