The recent downgrade of the US credit rating by Moody's to AA1 signifies growing concerns over the federal government's increasing debt and persistent budget deficits. Despite the Trump administration's attempts to dismiss the downgrade, market reactions were negative, with rising long-term borrowing costs and declining stock prices, particularly in major indices like the S&P 500 and Nasdaq. Moody's indicated that the current fiscal measures are unlikely to effectively address the trend of ballooning deficits, even as Republicans push forward a significant tax and spending bill that could substantially increase the national debt over the next decade.
Moody's downgraded the US credit rating to AA1, escalating concerns over the rising US federal debt and contributing to a market downturn.
The US budget deficit is expected to keep rising as efforts to reduce spending and deficits through current proposals are deemed insufficient by Moody's.
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