Treasury Sec. Bessent dismisses Moody’s US downgrade as Trump tax-cut debate continues

Treasury Secretary Scott Bessent on Sunday dismissed Moody’s downgrade of the US sovereign credit rating, saying President Trump’s administration would ensure US economic growth outpaced its debt.

“I don’t put much credence in the Moody’s” downgrade, Bessent said on CNN’s “State of the Union” program.

Bessent said the tax-cut bill being debated in Congress would spur economic growth that would outpace what the nation owed.

Treasury Secretary Scott Bessent. AFP via Getty Images

Moody’s on Friday cut the US credit rating by one notch, citing rising debt and interest payments that outpace those of similarly rated sovereigns, in a move that marks the end of an era as Moody’s was the last major agency to maintain a triple-A rating for US sovereign debt.

The downgrade to “Aa1” from “Aaa” follows a change in the outlook on the sovereign in 2023 due to wider fiscal deficit and higher interest payments, and comes as Congress debates tax and spending plans that could deepen the US fiscal hole.

Moody’s was the last major agency to maintain a triple-A rating for US sovereign debt. AFP via Getty Images

“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 Friday, as it changed its outlook on the US to “stable” from “negative.”