US Debt Downgraded Again

 It was HUGE news some years ago when USA lost it's AAA bond rating by Moody's.  How could it be that America didn't get a PERFECT credit rating?  But that news was in the past.

Today we read that the $36 trillion in debt is being downgraded again.  But most Americans will have no clue that this happened.  And even if they did they won't understand what it means or why it means anything.

In short, America is being viewed as a MORE RISKY LENDER and people that buy more risky debt are going to expect a higher interest rate for buying that more risky debt.

And if USA is already paying a mountain of interest...they are about to pay more.

Stocks closed largely unchanged on Monday despite a downgrade of U.S. credit, which triggered a spike in debt yields and threatened to raise borrowing costs throughout the nation's economy.

The Dow Jones Industrial Average closed up 137 points, or 0.3%, while the S&P 500 climbed 0.09%. The tech-heavy Nasdaq increased 0.02%.

Moody's, a top ratings agency, cut the U.S. credit rating on Friday, dropping it one notch from the top rating of Aaa to a lower classification of Aa1.

The credit downgrade unleashed a selloff of U.S. debt over the weekend, sending Treasury yields higher, which in turn raised the cost of U.S. borrowing and stoked investor fears about wider impact across the economy.

"This is a major symbolic move as Moody’s were the last of the major rating agencies to have the U.S. at the top rating," a Deutsche Bank analyst said Monday in a client note shared with ABC News.

The Treasury selloff sent long-term yields soaring above the level attained in the immediate aftermath of President Donald Trump's "Liberation Day" tariffs. That spike in yields helped persuade Trump to suspend a major swathe of the tariffs, Trump later said.

The current spike in debt yields coincides with U.S. House Republicans' push to pass a domestic policy bill that includes broad tax cuts. The nonpartisan Congressional Budget Office warned last month that the bill would raise the nation's debt, which now stands at about $36 trillion.

The credit reassessment at Moody’s came years after similar downgrades of U.S. debt at the two other major credit agencies: S&P in 2011 and Fitch in 2023.

The S&P 500 fell more than 1% in early trading on Monday, before recovering nearly all of the losses. The Dow and Nasdaq also moved lower early in the day, but each later turned upward.

Here;  Stocks close little changed after Moody's downgrades US debt - ABC News

Remember how bankruptcy happens.  It starts slowly and then happens suddenly.  It almost always takes people by surprise.