Moody's rating cuts U.S. credit rating AA1 was quoted from AA1 at the highest three times A on Friday, citing the budget burden the government faces under high interest rates.

"This No. 1 downgrade on our 21 rating scale reflects the growth of the government debt-to-interest payment ratio over a decade, with a significantly higher level than sovereigns with similar ratings," the rating agency said in a statement.

The interest cost of U.S. Treasury debt continues to rise due to higher interest rates and more debt financing, and the U.S. is in a massive budget deficit. To date, the fiscal deficit has totaled $1.0.5 trillion, 13% higher than the same period last year. However, the influx of tariffs helped scrape off some imbalances last month.

Moody's has been making our sovereign debt possible with its highest credit rating and aligning the 116-year-old institution with its competitors. Standard & Poor lowered the U.S. from AAA to AA+ in August 2011, and the Fitch rating also lowered the U.S. rating from AA+ to August 2023.

The news came as the Republican-led House Budget Committee rejected President Donald Trump’s agenda package on Friday, which included expanding 2017 tax cuts.

"The continuous U.S. government and Congress failed to reach consensus on measures to reverse the trend of large annual fiscal deficits and growing interest costs," Moody's said. "We believe that years of reduction in material for mandatory spending and deficits will be due to fiscal recommendations currently under consideration."

Moody first formally evaluated U.S. bonds in 1993, but since 1949, it has assigned the AAA's "National Ceiling Rating" to the United States.

Benchmark 10 years of fiscal revenue In after-hours trading, the stock is 3 basis points higher, with a trading rate of 4.48%. Ishares Treasury ETFs over 20 years have fallen by about 1% in expansion trading, while the SPDR S&P 500 ETF Trust has fallen by 0.4%.

“The Treasury is still dealing with the fundamental factors that foreign countries need less demand for them, and the size of the debt pile that needs constant refinancing is constantly changing, but that is symbolic because it is a major rating agency, the United States has already created debt and deficits.”

In response to Trump's trade war last month, Treasury yields rose and the dollar weakened its global peers, suggesting investors could deviate from the U.S., the safest place to invest.