Bankinter | Moody’s downgrades the US credit rating to Aa1 (Stable) from Aaa (Negative). According to the agency, it “reflects the increase over more than a decade in government debt and interest payment ratios to levels significantly above those of countries with similar ratings”.
Analysis team’s view: It is the last of the three rating agencies to cut the triple-A; Fitch and S&P were already at AA+ Stable. S&P did it in 2011 and Fitch had announced it in August 2023. Moody’s had downgraded the outlook from “stable” to “negative” in November 2023. Scott Bessent, US Treasury Secretary, noted that it is a “lagging indicator”. The T-Note yield has rebounded more than 8bp since last Thursday and is above 4.51% this morning.
