DAISHIN SECURITIES analyzed on the 18th that the shock to the financial market from the recent downgrade of the U.S. credit rating by the international credit rating agency Moody's will be limited.
Gongdongrak, a researcher at DAISHIN SECURITIES, noted, “Considering that two rating agencies have already downgraded the credit rating and that Moody's outlook for the U.S. was already 'negative', it is unlikely that the shock will spread throughout the financial market.”
Additionally, it was added, “Moody's cited the burden of increasing U.S. Treasury issuance following the Trump administration's tariff imposition and concerns over slow improvement in the fiscal deficit as reasons for the rating downgrade, highlighting that U.S. Treasury bonds have already been reflecting this fact in advance, which is also the basis for expecting limited impact.”
On the 16th (local time), Moody's lowered the long-term issuer rating and senior unsecured bond rating of the U.S. government from 'Aaa' to 'Aa1' due to its significantly higher government liabilities and interest payment ratios compared to similar-rated countries.
Moody's pointed out, “The U.S. administration and Congress have failed to agree on measures to reverse the trend of large fiscal deficits and increasing interest costs,” adding, “I do not expect mandatory expenditures and deficits to materially decrease for many years to come.”
The downgrade of the U.S. credit rating by the three major global credit rating agencies is the third occurrence, following Standard & Poor's (S&P) in 2011 and Fitch in 2023. As a result, the U.S. has lost its top credit rating status from all three major global rating agencies.