Years of rising deficits and budget chaos finally caught up with the U.S. credit rating Friday when Moody’s Investor Service downgraded the government, stripping its last triple-A rating.
Moody’s, in a news release after the market close, said it had cut the U.S. rating by one notch, to Aa1 from Aaa, and that the move “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.”
Moody’s
MCO
+0.52%
was the last of the major credit-rating firms to strip the U.S. of a triple-A rating.
Investors appeared to doubt the move would have much lasting market impact, but were braced for a near-term reaction.
“We don’t think this is a game changer but does provide an excuse for investors to take a little bit of profits,” Keith Lerner, chief market strategist at Truist, told MarketWatch in an email.
Source: MarketWatch
