Moody's Strips U.S. of Last AAA Credit Rating
On May 16, 2026, Moody's downgraded the U.S. government's long-term credit rating from Aaa to Aa1, becoming the last of the three major credit agencies to strip the U.S. of its top-tier rating (following S&P in 2011 and Fitch in 2023). Moody's cited over a decade of growing federal deficits, rising debt-to-GDP projections reaching 134% by 2035, and repeated failures by successive administrations and Congress to address the fiscal trajectory. The downgrade came as Congress debated the "One Big Beautiful Bill" reconciliation package, sending the 30-year Treasury yield surging past 5%.
“I think that Moody's is a lagging indicator. I think that's what everyone thinks of credit agencies. And just like Sean Duffy said with our air traffic control system, we didn't get here in the past 100 days. It's the Biden administration and the spending that we have seen over the past four years. If we go back to your initial question on the Moody's downgrade, who cares? Qatar doesn't. Saudi doesn't. UAE doesn't.”