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President Trump said new import tariff rates are coming soon<\/p>\n
During his trip to the Gulf, President Trump said his administration would be sending letters to countries informing them of new tariff rates.<\/p>\n
Moody\u2019s Ratings has downgraded the nation\u2019s credit rating one notch from Aaa to Aa1,\u00a0leaving the U.S. government without a top grade among any of the major rating agencies<\/a>.\u00a0<\/p>\n Moody’s cited<\/a> rising debt and interest payment ratios that are \u201csignificantly higher than similarly rated sovereigns.\u201d \u00a0<\/p>\n \u201cSuccessive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,\u201d Moody\u2019s said in a Friday news release. \u201cThe U.S.’s fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns.\u201d\u00a0<\/p>\n For U.S. consumers, lower ratings could lead to higher borrowing costs.<\/p>\n Why did Moody\u2019s downgrade the U.S.?\u00a0<\/strong>\u00a0<\/p>\n The switch comes after Fitch Ratings<\/a> downgraded the nation to AA+ from AAA in 2023. Standard & Poor\u2019s downgraded the nation\u2019s credit rating in 2011.\u00a0\u00a0<\/p>\n Moody\u2019s cites federal debt that has risen \u201csharply\u201d due to continuous fiscal deficits, driven by increased federal spending and reduced government revenues through tax cuts.\u00a0\u00a0<\/p>\n The agency notes the latest tax bill draft<\/a> from the GOP would add about $4 trillion to the federal primary deficit over the next decade, and said it doesn\u2019t believe the proposal would result in \u201cmaterial multi-year reductions in mandatory spending and deficits.\u201d \u00a0\u00a0<\/p>\n Federal deficits are expected to widen from 6.4% of GDP in 2024 to 9% by 2035, driven by increased interest payments on debt, rising entitlement spending and relatively low revenue generation. \u00a0\u00a0<\/p>\n Moody\u2019s goes from negative to stable outlook\u00a0<\/strong>\u00a0<\/p>\n The agency also changed its outlook to stable from negative to reflect \u201cbalanced risks at Aa1,\u201d noting that the nation retains \u201cexceptional credit strengths such as the size, resilience and dynamism of its economy\u201d and the role of the U.S. dollar as the global reserve currency.\u00a0\u00a0<\/p>\n And while there has been policy uncertainty in recent months, Moody\u2019s expects the U.S. to continue a \u201clong history of very effective monetary policy\u201d led by an independent Federal Reserve.\u00a0\u00a0<\/p>\n How could the downgrade affect consumers?\u00a0<\/strong>\u00a0<\/p>\n A lower rating could boost Treasury bond interest rates, increasing government borrowing costs and further driving up the federal debt. And because Treasury bonds influence rates for assets like 30-year fixed mortgages and corporate bonds, a lower credit rating could push up borrowing costs<\/a> for consumers, as previously reported<\/a> by USA TODAY.\u00a0<\/p>\n