US Treasury Secretary Scott Bessent dismisses Moody's govt rating cut: ‘I don't put much credence in…’

United States Treasury Secretary Scott Bessent, in an interview with CNN, dismissed the ratings downgrade from the US-based ratings firm Moody's, reported the news agency Reuters on Sunday, 18 May 2025.

“I don't put much credence in Moody's,” said Bessent, cited in the agency report. 

This comes after the American ratings firm Moody's downgraded the US government's long-term issuer and senior unsecured ratings to “Aa1” from its previous “Aaa” levels.

Moody's ratings cut

According to Mint's earlier report, Moody’s Investors Service downgraded the United States’ sovereign credit rating on Friday, 16 May 2025, on rising concerns over the nation's growing $36 trillion debt burden.

The ratings agency also lowered the US government's long-standing rating by one notch to “Aa1” from “Aaa” and revised its outlook to “Stable” from its previous level of “Negative.” 

Moody's has maintained its US government ratings at the “Aaa” level since 1919, and this revision marks the last of the three major credit rating firms to downgrade the US credit rating.

“Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” said Moody's, according to the report.

The ratings firm also indicated that if the US government returns to fiscal discipline through increased revenues or reduced spending, it can lead to a ratings upgrade in the future. 

Moody's Outlook for US economy

Even though Moody's downgraded the ratings of the United States’ sovereign credit, the firm highlighted some credit strengths like large size, resilience, high average incomes, and strong track record of innovation.

The ratings firm expects that the United States will maintain its institutional strengths, including the constitutional separation of powers and an effective, independent monetary policy from the US Federal Reserve.

They also cited how the US dollar is still prevailing as the world's dominant reserve currency, which gives the US government strong backing despite high fiscal deficit in the nation's economy.

It is reportedly not very likely to find any credible alternative to the US dollar as a global reserve currency, according to the Moody's report. However, Moody's also expects that the US will add $4 trillion to the federal primary deficit in the next ten years due to the entitlement spending increases and the flat revenue growth in the economy.