In a blow not seen since 1917, Moody’s just downgraded America’s credit rating from perfect AAA to Aa1. Markets are shocked by this downgrade, which cites ballooning debt and Washington’s deficits. Bond yields spiked, with the 30-year yield hitting the crucial 5% mark, and even the typically resilient dollar weakened.
Wall Street sees this as a clear signal that the US Treasuries’ once-unquestioned “safe haven” status is under scrutiny. Treasury Secretary Scott Bessent dismissed Moody’s decision as outdated, but experts warn it could amplify ongoing pressures and trigger another “Sell America” wave like in the past.
Bonus: Check out the US deficit.
In Context: After a late-night vote, the Trump Administration’s tax and immigration bill passes.
