Anna Helhoski

Hey, Anna. Hey, Sean and Elizabeth. Yeah, so Moody's, one of the big credit rating agencies, downgraded the U.S. rating from AAA to AA1. Now, on face value, that sounds pretty far removed from our everyday lives, right? But there are implications for the broader economy that can have ripple effects on our financial lives, especially when it comes to investing.

Hey, Anna. Hey, Sean and Elizabeth. Yeah, so Moody's, one of the big credit rating agencies, downgraded the U.S. rating from AAA to AA1. Now, on face value, that sounds pretty far removed from our everyday lives, right? But there are implications for the broader economy that can have ripple effects on our financial lives, especially when it comes to investing.

Hey, Anna. Hey, Sean and Elizabeth. Yeah, so Moody's, one of the big credit rating agencies, downgraded the U.S. rating from AAA to AA1. Now, on face value, that sounds pretty far removed from our everyday lives, right? But there are implications for the broader economy that can have ripple effects on our financial lives, especially when it comes to investing.

Before we get to that, can you talk more about the rating system and why it matters? Sure. So the U.S. credit rating evaluates the government's ability to pay its debts. It's set by three major credit rating agencies, Fitch Ratings, S&P Global Ratings, and Moody's Investors Services. Now, Moody's was the last holdout of the three top credit rating agencies to downgrade the U.S. rating.

Before we get to that, can you talk more about the rating system and why it matters? Sure. So the U.S. credit rating evaluates the government's ability to pay its debts. It's set by three major credit rating agencies, Fitch Ratings, S&P Global Ratings, and Moody's Investors Services. Now, Moody's was the last holdout of the three top credit rating agencies to downgrade the U.S. rating.

Before we get to that, can you talk more about the rating system and why it matters? Sure. So the U.S. credit rating evaluates the government's ability to pay its debts. It's set by three major credit rating agencies, Fitch Ratings, S&P Global Ratings, and Moody's Investors Services. Now, Moody's was the last holdout of the three top credit rating agencies to downgrade the U.S. rating.

In 2011, at the tail end of the Great Recession, S&P Global Ratings lowered the U.S. 's rating to AA plus from AAA. And in 2023, Fitch issued the same downgrade to AA plus. A lower credit rating from Moody's signals that the U.S. government is at bigger risk of default.

In 2011, at the tail end of the Great Recession, S&P Global Ratings lowered the U.S. 's rating to AA plus from AAA. And in 2023, Fitch issued the same downgrade to AA plus. A lower credit rating from Moody's signals that the U.S. government is at bigger risk of default.

In 2011, at the tail end of the Great Recession, S&P Global Ratings lowered the U.S. 's rating to AA plus from AAA. And in 2023, Fitch issued the same downgrade to AA plus. A lower credit rating from Moody's signals that the U.S. government is at bigger risk of default.

They all have to do with multiple macroeconomic factors, but in all three cases, the debt limit has been a major factor in the decisions. The debt limit is the amount of money the government can borrow in order to meet its legal obligations, as in funding programs that have already been approved by Congress. Right now, the government is in danger of running out of money to meet those obligations.

They all have to do with multiple macroeconomic factors, but in all three cases, the debt limit has been a major factor in the decisions. The debt limit is the amount of money the government can borrow in order to meet its legal obligations, as in funding programs that have already been approved by Congress. Right now, the government is in danger of running out of money to meet those obligations.

They all have to do with multiple macroeconomic factors, but in all three cases, the debt limit has been a major factor in the decisions. The debt limit is the amount of money the government can borrow in order to meet its legal obligations, as in funding programs that have already been approved by Congress. Right now, the government is in danger of running out of money to meet those obligations.

Back in January, the Treasury said it would need to take extraordinary measures so the U.S. could continue to pay for those programs. And that includes things like Social Security, Medicare, military salaries, tax refunds, and interest on the national debt. If the government doesn't lift the debt ceiling, it could run out of money and then default.

Back in January, the Treasury said it would need to take extraordinary measures so the U.S. could continue to pay for those programs. And that includes things like Social Security, Medicare, military salaries, tax refunds, and interest on the national debt. If the government doesn't lift the debt ceiling, it could run out of money and then default.

Back in January, the Treasury said it would need to take extraordinary measures so the U.S. could continue to pay for those programs. And that includes things like Social Security, Medicare, military salaries, tax refunds, and interest on the national debt. If the government doesn't lift the debt ceiling, it could run out of money and then default.

Yeah, bad to say the least. A default could be disastrous for the national and world economies. A default that lasts longer than a few days could result in a sell-off of U.S. debt, money market funds selling out, suspension of federal benefits, higher interest rates, tanking stock markets, delayed tax refunds.

Yeah, bad to say the least. A default could be disastrous for the national and world economies. A default that lasts longer than a few days could result in a sell-off of U.S. debt, money market funds selling out, suspension of federal benefits, higher interest rates, tanking stock markets, delayed tax refunds.

Yeah, bad to say the least. A default could be disastrous for the national and world economies. A default that lasts longer than a few days could result in a sell-off of U.S. debt, money market funds selling out, suspension of federal benefits, higher interest rates, tanking stock markets, delayed tax refunds.

On the individual level, it could result in higher interest rates and tightening credit requirements. And biggest of all, a default would trigger a recession that could domino to the rest of the world. So you can see why even nearing a default worries credit ratings agencies. The U.S. government has never defaulted beyond a very brief technical glitch in 1979, but it has come close to it.

On the individual level, it could result in higher interest rates and tightening credit requirements. And biggest of all, a default would trigger a recession that could domino to the rest of the world. So you can see why even nearing a default worries credit ratings agencies. The U.S. government has never defaulted beyond a very brief technical glitch in 1979, but it has come close to it.