“The bond market has been particularly focused on the progress of Washington this year. As Congress debates the “big and beautiful bills,” bond vigilants will be eagerly watching the boundaries that make them fiscally responsible. All three credit institutions point to all three credit institutions, pointing to annual overspending in the year, which is at a very small time for peace sums up, where few people are almost nothing.

Talley Leger, Chief Marketing Strategist, Fortune Consulting Group, New Jersey

"The downgrade is late. I tend to use it as a counter-trend indicator to buy dollar-denominated assets. U.S. trade sold became too high in April, which is partly why our market rebounded so strongly in May. I think it's because of the ongoing pessimism, which is optimistic about our long-term optimism."

James Humphries, Indianapolis Mindset Wealth Management Partner

“Moody’s decision to reduce U.S. long-term debt from AAA to AA1 today marks the first time that all three major credit institutions (Moody’s, S&P and Fitch) have rated the U.S. below the highest level. While this change is unlikely to have immediate market consequences, the focus on U.S. fiscal trajectory has attracted attention.

“Moody’s cites several key factors: the persistent high deficit, the rise in interest burden and the erosion of fiscal policy making due to political polarization. U.S. federal debt accounts for about 124% of GDP as of 2025, with an annual interest rate cost of about GDP, and is expected to last $100 million within defense and health insurance over the next few years.

“The downgrade does not reflect questions about the US repaying its obligations in the short term. Treasury bills remain the liquid and most popular tool in the global fixed income market. However, from the perspective of credit analysts, basic fiscal dynamics are increasingly difficult to ignore.

“It is also worth noting that Moody’s shifted the U.S. outlook from ‘negative’ to ‘stable’, indicating that there will be no further downgrade in the near future – and that the expected conditions will not deteriorate significantly. This is in stark contrast to the Fitch and S&P, both of which have attracted similar attention over the past few years, focusing primarily on debt-debt debt, which is structural reform.

“For investors, this downgrade may be more symbolic than it feels feasible. After the announcement, there was no substantial increase in treasury yields and demand for U.S. debt remains strong. However, the long-term impact is clear: sustained fiscal expansion without a reliable stable debt effort will ultimately affect the reliable efforts of debt, which may affect borrowing costs and economic flexibility.”

Keith Lerner, Co-Chief Investment Officer, TRUIST Consulting Services, Atlanta

"There are some signs that we are acting like this (toward a downgrade). It's surprising that now we've actually passed new legislation on the tax bill."

“This can give people an excuse to make some profit, but I don’t know that this is a game-changer overall.”

“Now, there is a war in the market where we want higher rates and interactions with interest rates, how much we want to promote growth policies.”

Darrell Duffie, a finance professor at Stanford School of Business, was formerly a Moody's board member

"This basically adds to the evidence that the U.S. has too much debt … I think policymakers have received the information, and I'm not sure how they're going to handle that information. Congress just needs disciplinary action, either getting more income or spending less income."

Stephen Moore, former senior economic adviser to former President Donald Trump and Heritage Foundation economist

"It's outrageous. Moody's has now become the political arm of the Democratic Party. How to expand Trump's tax cuts to reduce the value of bonds. If U.S.-backed government bonds are not triple assets, what is that?"

Christopher Hodge, chief economist in the United States, Natixis, NY

"Financial domination and irresponsible governance - including the deadlock of permanent debt ceilings - is not something new, and there will be a fiscal day when Congress must pay off debt. The ability of the U.S. to borrow remains irrelevant, but potential incomes are generated, potential incomes are unparalleled. Point markets will impose discipline, which will force cuts, but the current demand remains abundant for U.S. debt."

Tom Di Galoma, Managing Director of Rates and Transactions at Misler Finance, Parker, Utah

"It's very surprising. It's big and the market simply doesn't expect that. I think it emphasizes the issues in the Congressional budget negotiations, which failed to pass the House committee today."

Spencer Hakimian, CEO of Tolou Capital Management, New York

“Moody’s downgrade of credit ratings in the U.S. is a long trend that continues, a trend of fiscal irresponsibility that will ultimately lead to higher borrowing costs in the public and private sectors in the U.S..”

“I didn’t even blink, it wasn’t surprising to me.”

Brian Bethune, Professor of Economics at Boston College in Newton, Massachusetts

"It sounds similar to what S&P did in 2011. The announcement from the S&P (downgrade) was not well received by the market and led to a budget quarantine agreement...which led to a reduction in the deficit. Then, Trump cut taxes (in his first term), so we pulled out of the compromise."

"The downgrade is a wake-up call for Republicans. They must come up with a solid budget agreement that puts the deficit on a downward trajectory."

Jay Hatfield, CEO of Infrastructure Capital Advisor, New York

"This news comes at a time when the market is very fragile, so we'll likely see a reaction. I hope the S&P is less than 100 points or so, but expect it to stabilize later this week. I suspect all tariff-related announcements may have played a role in the downgrade, even if they don't say that."

(Compiled by the Global Finance and Markets Break News Team)