NEW YORK, May 16 (Xinhua) -- Moody's Ratings on Friday slashed U.S. long-term issuer and senior unsecured ratings to Aa1 from Aaa citing rising government debt and interest payment ratios.
Meanwhile, Moody's Ratings changed the outlook of U.S. sovereign rating from negative to stable.
"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," said a release by Moody's Ratings.
Moody's Ratings changed the outlook of U.S. sovereign rating from stable to negative in November 2023.
"Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs," said the release.
"We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration. Over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat," said the release.
In turn, persistent, large fiscal deficits will drive the government's debt and interest burden higher, said Moody's Ratings.
U.S. fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns, according to the credit rating agency.
The downgrade on Friday means the United States has lost its last triple-A credit rating from a major ratings firm following cuts by Fitch Ratings in 2023 and S&P Global Ratings in 2011.
