Downgrade

1. Credit rating.

A worsening in a credit rating assessment.

For example, Moody's downgraded the US sovereign credit rating by one notch from Aaa to Aa1 in May 2025.

US government debt and interest payment ratios are high

"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.

Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs.

We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration.

Over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat.

In turn, persistent, large fiscal deficits will drive the government's debt and interest burden higher.

The US' fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns."

Moody's Ratings downgrades United States ratings to Aa1 from Aaa - 16 May 2025.

Concerns about US's growing $36 trillion of debt

"Moody's downgraded the U.S. sovereign credit rating on Friday due to concerns about the nation's growing, $36 trillion debt pile, in a move that could complicate President Donald Trump's efforts to cut taxes and send ripples through global markets.

Moody's first gave the United States its pristine "Aaa" rating in 1919 and is the last of the three major credit agencies to downgrade it...

... the administration's attempts to raise revenue and cut spending have so far failed to persuade investors.

Trump's attempts to cut spending through Elon Musk's Department of Government Efficiency have fallen far short of its initial goals. And attempts to raise revenue through tariffs have sparked concerns about a trade war and global slowdown, roiling markets.

Left unchecked, such worries could trigger a bond market rout and hinder the administration's ability to pursue its agenda.

The downgrade, which came after market close, sent yields on Treasury bonds higher..."

Moody's cuts America's pristine credit rating, citing rising debt - Reuters - 17 May 2025.

In another example, Standard & Poor's re-rated Walt Disney downward in April 2020.

The rating was REDUCED to A-.

This was mainly due to the effects of COVID-19 on Disney's theme parks, TV and film businesses.

2.

More generally, a worsening in any assessment including (but not necessarily) a credit assessment.

See also

• Bond
• Bond vigilante
• Credit rating
• Credit risk
• Default
• De-listing
• eurozone crisis
• Financial distress
• Firm
• Fiscal
• Fitch
• Household
• Moody's
• Notch
• Private
• Private sector
• Recession
• Rescheduling
• Restructuring
• Sovereign
• Sovereign debt
• Sovereign debt crisis
• Sovereign risk
• Standard & Poor's
• Treasury
• Trump 2.0
• Trumponomics
• Upgrade
• Yield

Other resources

• Press release - Moody's Ratings downgrades United States ratings to Aa1 from Aaa; changes outlook to stable - 16 May 2025
• Moody's cuts America's pristine credit rating, citing rising debt - Reuters - 17 May 2025