Moody's decision should not be a surprise. It's for two reasons.
The first of them is that it was the last rating agency belonging to the so -called The Great Three – Moody's, S&P Global Ratings and Fitch Ratings, which kept the highest assessment of creditworthiness for the United States debt.
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The second reason is signals that have been coming from the agency for a long time. It is enough to mention that almost a year ago Moody's changed the perspective for assessing from stable to negative.
“Although we are aware of the significant economic and financial force of the United States, we believe that it no longer fully balances the decrease in fiscal indicators” – we read in the agency's statement.
In the justification for the decision, Moody's blames subsequent administrations and congress for the growing budget deficit, which, he said, shows no signs of improvement.
It is also in vain to assume that whatever will change in the near future. Work is underway in Congress on a gigantic tax and league law, which in the coming years is to increase the federal debt by trillion dollars. The White House on Friday presented this decision as a political decision.
The decision met with a quick response of the White House. Steven Cheung, spokesman for President Donald Trump, in a post published on a social network x, He criticized Marek Zandi, an economist from Moody's Analytics, accusing him of for a long time criticizing administration policy.
The reaction of the markets was equally fast. The profitability of the American ten -year -old fired in response to the Moody's message reaching 4.49 percent.
“Lowering the rating may mean that investors will demand a higher profitability of treasury bonds” – said Tracy Chen, a portfolio managing in Brandywine Global Investment Management.
Although American assets have increased in response to earlier discounts of US ratings by Fitch and S&P, “The question remains whether the market will react differently because the safe nature of tax bonds and the American dollar may be a bit uncertain“.
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The expert emphasizes that the change occurs at the moment, When the federal budget deficit approaches $ 2 trillion a year, i.e. over 6 percent. gross domestic product. Additionally The weakening of the US economy as a result of the global customs war will increase the deficit, because government expenditure usually increases when the economy slows down.
