Overview

• Moody's downgraded the U.S. sovereign credit rating to Aa1 on May 16, 2025, citing persistent deficits, rising debt, and political gridlock.
• The term premium on 10-year U.S. Treasuries has risen to 0.75%, its highest in a decade, with analysts projecting an additional 50 basis points this year.
• U.S. public debt has reached 100% of GDP and is projected to climb to 134% within the next decade, straining long-term fiscal sustainability.
• Net interest payments on U.S. debt now rival the defense budget and could consume 30% of tax revenue by 2035, according to Moody's projections.
• Global investors are reevaluating U.S. assets, driven by heightened policy risks and concerns over de-dollarization in the global financial system.