The U.S. credit rating faces a "full sweep" downgrade! All three agencies have stripped the AAA crown!
Latest news:
Moody's rating agency officially announced today that it has downgraded the U.S. credit rating from the highest AAA to AA1. This means that the U.S. has now been stripped of its highest credit rating by all three major global rating agencies—S&P removed the U.S. AAA rating back in 2011, and Fitch took the same action last August.
Why the sudden downgrade?
The rating agencies provided three main reasons:
1. The government is too indebted: It is expected that by 2035, the U.S. debt will reach 134% of the national annual GDP (currently it is already 98%).
2. The burden of interest is too heavy: The pressure on the government just to pay interest is increasing significantly.
3. Constant bickering between the two parties: The Democratic and Republican parties always drag their feet until the last moment to resolve the debt issue.
Market Reaction:
Global investors are frantically selling today, with stocks, bonds, and gold all declining, resulting in a rare "sell everything" phenomenon. This situation typically indicates a sudden cash shortage among everyone.
Background information:
- Credit ratings are like a country's "credit score", with AAA being the highest.
- A downgrade could lead to increased borrowing costs for the U.S., ultimately affecting ordinary people's loan interest rates.
- This is the first time in U.S. history that all three major agencies have simultaneously revoked the highest rating.
Meanwhile:
The Trump team suddenly announced plans to change trade strategies, canceling the previous plan to negotiate with individual countries and opting for a unified global tariff increase, with a formal notice expected within 2-3 weeks. However, compared to the credit downgrade, the market impact of this news is much smaller.
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The information and data mentioned in the content are sourced from publicly available materials, striving for accuracy and reliability, but no guarantee is made regarding the accuracy and completeness of the information. The content does not constitute any investment advice, and responsibility for investment based on it lies solely with the investor!
