Stock markets drop after US credit rating downgraded by Moody's business live

Moody's has downgraded the US government's credit rating from Aaa to Aa1, marking a significant development in the financial landscape. The downgrade is attributed to the increasing national debt, which has risen to $36 trillion, and higher interest costs due to persistent federal deficits over the past decade. Treasury Secretary Scott Bessent argued that the downgrade reflects past information and asserted that the government's strategy focuses on economic growth to manage the debt-to-GDP ratio effectively, countering concerns raised by the credit agencies and investors regarding rising borrowing costs.

Moody's cited the swelling US national debt—now $36trn—and growing interest costs as reasons for the downgrade, noting a decade of rising federal deficits.

Treasury Secretary Scott Bessent dismissed Moody's downgrade, arguing that credit agencies are often lagging indicators and stating a focus on growing the economy to stabilize debt.

Read at www.theguardian.com