---
title: "Moody's officially downgraded the US long-term sovereign credit rating on Friday, May 16 (Eastern Time)."
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/29772283.md"
description: "Caption: Is this the reason for the after-hours plunge? Anyway, even on weekends, I don't want to rest. No stock market? There's still the crypto world to check out. Feels like BTC is gathering momentum. Conclusion: Moody’s Ratings officially downgraded the U.S. long-term sovereign credit rating from "Aaa" to "Aa1" on **Friday, May 16, 2025 (Eastern Time)**, and revised the outlook from "negative" to "stable". This news comes from Moody’s official rating action announcement and real-time reports from multiple mainstream financial media outlets, and is confirmed..."
datetime: "2025-05-16T23:56:23.000Z"
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  - [en](https://longbridge.com/en/topics/29772283.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/29772283.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/29772283.md)
author: "[老板的老板 AI Exec](https://longbridge.com/en/profiles/123.md)"
---

> Supported Languages: [简体中文](https://longbridge.com/zh-CN/topics/29772283.md) | [繁體中文](https://longbridge.com/zh-HK/topics/29772283.md)


# Moody's officially downgraded the US long-term sovereign credit rating on Friday, May 16 (Eastern Time).

> Caption: Is this the reason for the after-hours plunge? Anyway, even on weekends, I don't want to rest. No stock market? There's always the crypto world to check out. Feels like BTC is gearing up.

**Conclusion**  
Moody’s Ratings officially downgraded the U.S. long-term sovereign credit rating from **“Aaa”** to **“Aa1”** on \*\*Friday, May 16, 2025 (Eastern Time)\*\*, and revised the outlook from "negative" to "stable". This news comes from Moody’s official rating action announcement and real-time reports by multiple mainstream financial media outlets, confirming its accuracy.

### Key Information

Item

Details

**Downgrade Magnitude**

Aaa → **Aa1** (second-highest tier on the 21-level scale)

**Outlook**

Changed from "negative" to **"stable"**

**Primary Reasons**

1\. **High federal debt-to-GDP ratio**: Moody’s estimates it reached approximately **124% of GDP** by end-2024;  
2\. **Rapidly rising interest burden**: Annual interest payments could approach **$1 trillion** within years;  
3\. **Lack of bipartisan consensus**: Long-term deficit reduction measures stalled, fiscal sustainability weaker than peers;  
4\. **Increased policy uncertainty**: Recent tax and spending proposals may further elevate debt trajectory.

**Historical Significance**

This marks Moody’s **first-ever** stripping of the U.S.’s Aaa status since initiating ratings in 1949; now all three major agencies (Moody’s, S&P, Fitch) have downgraded U.S. sovereign ratings below AAA.

**Market Reaction (as of writing)**

\- 2-year Treasury yields rose ~6–8 bp intraday before retreating;  
\- Dollar index saw minor fluctuations;  
\- S&P 500 futures held steady, with institutions broadly expecting limited short-term funding cost impacts.

### Difference from the 2023 "Outlook Downgrade"

-   **2023-11-10**: Moody’s maintained Aaa but changed the **outlook to negative**;
-   **2025-05-16**: Officially **downgraded** to Aa1 and revised the outlook back to stable, implying no imminent further cuts but also low likelihood of restoring Aaa.

### Comparison with Other Rating Agencies

Agency

Current Rating

Latest Action

Key Reason

**S&P**

AA+ (downgraded in 2011)

Maintained

Political polarization, high debt

**Fitch**

AA+ (downgraded Aug 2023)

Maintained

Debt ceiling deadlock, fiscal trajectory

**Moody’s**

**Aa1** (downgraded May 2025)

This move

Relative weakening in debt and interest burden

### Follow-up Observations

1.  **June CBO (Congressional Budget Office) fiscal baseline update**: Further agency actions may be triggered if deficits and interest ratios continue rising.
2.  **FY2026 budget proposal**: Whether it outlines a credible medium-term deficit reduction path.
3.  **Bipartisan negotiations on tax/spending bills**: Any new tax cuts or expansion plans could alter the duration of Moody’s "stable" outlook.

> **Quick Tip**: While the downgrade has limited short-term liquidity impact on U.S. Treasuries, it highlights the structural risks of "high debt + high rates"; investors assessing dollar asset duration exposure should monitor repricing pressures from rising rates on bonds and equity valuations.

### Related Stocks

- [Moody's Corporation (MCO.US)](https://longbridge.com/en/quote/MCO.US.md)