Overview

• Moody's has downgraded the U.S. sovereign credit rating from Aaa to Aa1, marking the first time the agency has removed its top-tier rating for U.S. debt.
• The downgrade was attributed to sustained increases in federal debt, high annual deficits, and a lack of bipartisan agreement on deficit-reduction measures.
• Republican lawmakers blocked a major spending-cut bill in Congress on the same day, further deepening the fiscal impasse.
• The White House rejected Moody's analysis, with officials criticizing the agency's conclusions and its chief economist, Mark Zandi.
• Despite the downgrade, Moody's maintained a stable outlook for the U.S., citing the economy's innovation, depth, and strong revenue-generating capacity as mitigating factors.