Overview
- Moody’s lowered the U.S. credit rating from Aaa to Aa1, citing unsustainable deficits and $36 trillion in national debt.
- Treasury yields climbed sharply, with the 30-year yield surpassing 5% and the 10-year yield reaching multi-month highs.
- Federal Reserve officials warned that higher borrowing costs could ripple through the economy, complicating monetary policy decisions.
- Congress debates a contentious tax and spending bill that could add trillions to the debt, further alarming investors and analysts.
- The downgrade has heightened global scrutiny of U.S. fiscal policy, with concerns about long-term debt sustainability and investor confidence.