America’s Credit Strength Just Got Cut Again: Should You Panic? Piero Cingari Economics

Moody’s Ratings has officially stripped the U.S. of its final AAA credit score — the highest mark of financial credibility — sparking political uproar and media alarm, yet market analysts and economists widely believe it will have limited impact on the broader financial system.

What Did Moody’s Decide About US Credit Rating?

Moody’s cut the U.S. long-term sovereign credit rating to Aa1 from Aaa on Friday, citing sustained fiscal deficits, rising debt burdens and growing interest costs.

The agency criticized “successive U.S. administrations and Congress” for failing to implement a credible debt reduction strategy.

This move aligns Moody’s with Fitch Ratings, which downgraded the U.S. in August 2023, and S&P Global Ratings, which cut the rating back in 2011.

For the first time, all three major credit agencies have the U.S. rated below AAA.

Do Markets Care This Time?

“This downgrade won’t force anybody to do anything on Monday,” said Jim Bianco of Bianco Research.

He noted that after S&P’s 2011 downgrade caused market disruption due to contract language requiring AAA-rated collateral, those rules were rewritten. “Now, these contracts reference ‘government securities,’ not ratings,” he said.

Bianco added, “So technically it didn’t even change the US’s overall credit rating because it was already split rated AA+. Now it’s unanimous AA+. Nothing changed.”

Debt Concerns Are Misguided

Macro analyst Alfonso Peccatiello also challenged the logic …

Full story available on Benzinga.com

Moody’s Ratings has officially stripped the U.S. of its final AAA credit score — the highest mark of financial credibility — sparking political uproar and media alarm, yet market analysts and economists widely believe it will have limited impact on the broader financial system.

What Did Moody’s Decide About US Credit Rating?

Moody’s cut the U.S. long-term sovereign credit rating to Aa1 from Aaa on Friday, citing sustained fiscal deficits, rising debt burdens and growing interest costs.

The agency criticized “successive U.S. administrations and Congress” for failing to implement a credible debt reduction strategy.

This move aligns Moody’s with Fitch Ratings, which downgraded the U.S. in August 2023, and S&P Global Ratings, which cut the rating back in 2011.

For the first time, all three major credit agencies have the U.S. rated below AAA.

Do Markets Care This Time?

“This downgrade won’t force anybody to do anything on Monday,” said Jim Bianco of Bianco Research.

He noted that after S&P’s 2011 downgrade caused market disruption due to contract language requiring AAA-rated collateral, those rules were rewritten. “Now, these contracts reference ‘government securities,’ not ratings,” he said.

Bianco added, “So technically it didn’t even change the US’s overall credit rating because it was already split rated AA+. Now it’s unanimous AA+. Nothing changed.”

Debt Concerns Are Misguided

Macro analyst Alfonso Peccatiello also challenged the logic …

Full story available on Benzinga.com

 Moody’s Ratings has officially stripped the U.S. of its final AAA credit score — the highest mark of financial credibility — sparking political uproar and media alarm, yet market analysts and economists widely believe it will have limited impact on the broader financial system.
What Did Moody’s Decide About US Credit Rating?
Moody’s cut the U.S. long-term sovereign credit rating to Aa1 from Aaa on Friday, citing sustained fiscal deficits, rising debt burdens and growing interest costs.
The agency criticized “successive U.S. administrations and Congress” for failing to implement a credible debt reduction strategy.
This move aligns Moody’s with Fitch Ratings, which downgraded the U.S. in August 2023, and S&P Global Ratings, which cut the rating back in 2011.
For the first time, all three major credit agencies have the U.S. rated below AAA.

S&P
Moody’s
Fitch

AA+
Aa1
AA+

Do Markets Care This Time?
“This downgrade won’t force anybody to do anything on Monday,” said Jim Bianco of Bianco Research.
He noted that after S&P’s 2011 downgrade caused market disruption due to contract language requiring AAA-rated collateral, those rules were rewritten. “Now, these contracts reference ‘government securities,’ not ratings,” he said.
Bianco added, “So technically it didn’t even change the US’s overall credit rating because it was already split rated AA+. Now it’s unanimous AA+. Nothing changed.”
Debt Concerns Are Misguided
Macro analyst Alfonso Peccatiello also challenged the logic …Full story available on Benzinga.com   Read MoreAMZN, Analyst Color, AVGO, credit rating, Expert Ideas, Government, Macro Economic Events, NVDA, PLTR, QQQ, Regulations, SPY, Stories That Matter, TLT, TSLA, UPS, Broad U.S. Equity ETFs, Econ #s, Top Stories, Economics, Analyst Ratings, ETFs, SPY, US78462F1030, TLT, US4642874329, AMZN, US0231351067, NVDA, US67066G1040, UPS, US9113121068, AVGO, SG9999006241, TSLA, US88160R1014, QQQ, US73935A1043, PLTR, Analyst Color, Government, Regulations, Macro Economic Events, Broad U.S. Equity ETFs, Econ #s, Top Stories, Economics, Analyst Ratings, ETFs, Benzinga Economics