Anna Helhoski

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.

In 2011, negotiations over the debt limit dragged on, and it led to the S&P downgrading the U.S. credit rating. Again, in 2023, the government narrowly avoided a fall after months of negotiations, and that led to the Fitch downgrade. Is the debt limit issue the reason Moody's downgraded the U.S. credit limit? It's definitely related, but it's not the only reason. Since 1917, the U.S.

In 2011, negotiations over the debt limit dragged on, and it led to the S&P downgrading the U.S. credit rating. Again, in 2023, the government narrowly avoided a fall after months of negotiations, and that led to the Fitch downgrade. Is the debt limit issue the reason Moody's downgraded the U.S. credit limit? It's definitely related, but it's not the only reason. Since 1917, the U.S.

In 2011, negotiations over the debt limit dragged on, and it led to the S&P downgrading the U.S. credit rating. Again, in 2023, the government narrowly avoided a fall after months of negotiations, and that led to the Fitch downgrade. Is the debt limit issue the reason Moody's downgraded the U.S. credit limit? It's definitely related, but it's not the only reason. Since 1917, the U.S.

held a perfect credit rating for Moody's, so the one-notch downgrade is a big shift. And that said, the U.S. credit rating is still considered stable, which means it's not dire. But the Moody's action still demonstrates that confidence in the U.S. economy's trajectory has diminished.

held a perfect credit rating for Moody's, so the one-notch downgrade is a big shift. And that said, the U.S. credit rating is still considered stable, which means it's not dire. But the Moody's action still demonstrates that confidence in the U.S. economy's trajectory has diminished.

held a perfect credit rating for Moody's, so the one-notch downgrade is a big shift. And that said, the U.S. credit rating is still considered stable, which means it's not dire. But the Moody's action still demonstrates that confidence in the U.S. economy's trajectory has diminished.

In its explanation, Moody's laid out its concerns, including an increase in debt over the last decade and the growing interest payments eating up government revenue. Now over to the debt ceiling. The House GOP's recently passed budget includes a $4 trillion debt ceiling increase.

In its explanation, Moody's laid out its concerns, including an increase in debt over the last decade and the growing interest payments eating up government revenue. Now over to the debt ceiling. The House GOP's recently passed budget includes a $4 trillion debt ceiling increase.

In its explanation, Moody's laid out its concerns, including an increase in debt over the last decade and the growing interest payments eating up government revenue. Now over to the debt ceiling. The House GOP's recently passed budget includes a $4 trillion debt ceiling increase.

If approved by the Senate and signed by the president, that could very temporarily stave off another near crisis for about a year and a half, according to the Center on Budget and Policy Priorities. That's because the budget also contains policies that would worsen the deficit, including increased spending for things like defense and lower revenue due to big tax cuts.

If approved by the Senate and signed by the president, that could very temporarily stave off another near crisis for about a year and a half, according to the Center on Budget and Policy Priorities. That's because the budget also contains policies that would worsen the deficit, including increased spending for things like defense and lower revenue due to big tax cuts.

If approved by the Senate and signed by the president, that could very temporarily stave off another near crisis for about a year and a half, according to the Center on Budget and Policy Priorities. That's because the budget also contains policies that would worsen the deficit, including increased spending for things like defense and lower revenue due to big tax cuts.

Moody's specifically flagged expectations for the next 10 years that show flat growth and higher deficits. I asked our resident economist, Elizabeth Renter, her views on the downgrade, and she said that to Moody's, quote, the situation has reached a tipping point where Moody's believes U.S. economic strengths no longer outweigh its weaknesses.

Moody's specifically flagged expectations for the next 10 years that show flat growth and higher deficits. I asked our resident economist, Elizabeth Renter, her views on the downgrade, and she said that to Moody's, quote, the situation has reached a tipping point where Moody's believes U.S. economic strengths no longer outweigh its weaknesses.

Moody's specifically flagged expectations for the next 10 years that show flat growth and higher deficits. I asked our resident economist, Elizabeth Renter, her views on the downgrade, and she said that to Moody's, quote, the situation has reached a tipping point where Moody's believes U.S. economic strengths no longer outweigh its weaknesses.

So to your original question, debt ceiling negotiations are related to Moody's decision, but it's looking at the nation's broader financial stability, including overall debt and interest.

So to your original question, debt ceiling negotiations are related to Moody's decision, but it's looking at the nation's broader financial stability, including overall debt and interest.

So to your original question, debt ceiling negotiations are related to Moody's decision, but it's looking at the nation's broader financial stability, including overall debt and interest.

I did, but I'm no investing expert. So I'm bringing in NerdWallet investing writer Sam Taub to talk more about that. Hey, Sam, thanks for helping out.