White House Attacks Moody's after Downgrading US Credit Rating

The White House on Friday attacked Moody's Ratings' decision to downgrade the United States' credit rating, describing it as a political decision.

Stephen Cheung, a spokesman for President Donald Trump, said in a post on Twitter that Mark Zandi, an economist at Moody's Analytics, is a longtime critic of the administration's policies. He added, "No one takes his analysis seriously. He has been proven wrong time and time again."

Moody's downgraded the United States' credit rating on Friday in a move described as historic, raising questions about the country's status as the world's highest-quality sovereign in terms of creditworthiness.

With the downgrade from investment-grade Aaa to Aa1, Moody's joins Fitch and Standard & Poor's, which have already downgraded the world's largest economy.

Moody's said in a statement on Friday: "While we recognize the significant economic and financial strength of the United States, we believe these factors no longer fully offset the deterioration in fiscal indicators."

The agency explained that U.S. federal debt has risen sharply over more than a decade due to persistent fiscal deficits and cited pressures from rising interest rates.

The agency added: "This downgrade of one notch on our 21-notch rating scale reflects the more than decade-long increase in government debt ratios and interest payments to levels well above those of similarly rated peers."

Joe Lavornino, former chief economist on the White House National Economic Council during Trump's first term, said in an interview with Bloomberg TV on Friday that the timing of the announcement was "very strange." He added that Moody's assumptions on revenues are "very pessimistic" regarding growth.

Lavornella continued, "Fiscal hawks will certainly use this as a reason to be cautious about the future outlook."

Trump maintains that his economic agenda, which focuses on cutting taxes, reducing regulations, and imposing broad tariffs to bring manufacturing jobs back to the United States, will foster strong growth.

While it is unclear whether the downgrade will lead to policy changes in Washington, the move comes at a time when the federal budget deficit is running at nearly $2 trillion annually—or more than 6% of GDP. High interest rates in recent years have also increased the cost of servicing the government's debt.