US finances deteriorate: Moody's takes historic step by downgrading credit rating

Moody's has downgraded the United States' credit rating from Aaa to Aa1, citing rising debt and interest rates that are significantly higher than those of similarly rated countries. The credit rating agency stated that successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual budget deficits and increasing interest burdens.

Steven Cheung, spokesperson for former President Donald Trump, criticized the downgrade on social media, targeting Moody's economist Mark Zandi as a political opponent. The downgrade may make it harder for the US government to borrow at favorable rates, as investors prefer lending to governments with strong credit ratings.

This follows a similar downgrade by Fitch two years ago, marking the first time in over a decade that a major rating agency has taken such action.