“ Moody's downgrades United States credit rating on increase in government debt PUBLISHED PUBLISHED FRI, MAY 16 2025 4:52 PM EDTUPDATED 4 MIN AGO Yun Li@YUNLI626 WATCH LIVE Kent Nishimura | Los Angeles Times | Getty Images Moody's Ratings slashed the United State's credit rating down a notch toAa1 from the highest triple A on Friday, citing the budgetary burden the government faces amid high interest rates. "This one-notch downgrade on our 21-notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns," the ratings agency said in a statement. The U.S. is running a massive budget deficit as interest costs for Treasury debt continued to rise due to a combination of higher interest rates and more debt to finance. The fiscal deficit totaled $1.05 trillion year to date, 13% higher than a year ago. The influx in tariffs helped shave some of the imbalance last month, however. Moody's had been a holdout in keeping U.S. sovereign debt at the highest credit rating possible, and brings the 116-year-old agency into line with its rivals. Standard & Poor's downgraded the U.S. to AA+ from AAA in August 2011, and Fitch Ratings also cut the U.S. rating to AA+ from AAA, in August 2023. The benchmark 10-year Treasury yield shot 3 basis points higher in after-hours trading, trading at 4.48%. "Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs," Moody's said. "We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration." https://www.cnbc.com/amp/2025/05/16...it-rating-on-increase-in-government-debt.html
Traders are always constantly seeking a logical explanation for every market blip gyration without understanding the greater, wider, picture. Their perspective is wrong and flawed.
1. Moody's Maintains a Stable Outlook Despite the downgrade, Moody's shifted the U.S. credit outlook from negative to stable. Original bias post - A Chinese reporting on the USA economy LOL
I see. So the increase in treasury rates and decrease in equities that started when the news was released was not the reason those events happened? The day the market reversed and shot up near 10% when Trump changed his tariffs stance again, that wasn't driven by news? What are you saying exactly? Makes no sense.
I'm a day trader, that's my only concern and understanding and dissection. I don't care about swing trading and investment time horizons, and logic. Day trading is much more complicated and dynamic rather than simply betting up on good news, and betting down on bad news. To capture that one full move of the day relies on a variety of elements and variables and patience timing, and some leeway for art deviation sometimes.
Got it. Makes sense. I don't trade on news myself, I was just curious why the market fell so consistently in the last 15 minutes, as I assume something must have driven it.
But usually the news is often a trigger or starting point of the bigger intraday moves, so keeping an eye on it definitely isn't a bad idea and still doesn't mean you have to bet on the news, but taking a long signal right after news like this came out wouldn't be smart either.