May 17, Kathmandu-The United States has lost its final perfect credit rating after Moody’s downgraded the country from 'AAA' to 'Aa1', citing growing debt and rising interest costs. This marks the first time since 1917 that the U.S. no longer holds a top rating from any of the three major agencies, following similar downgrades by Fitch in 2023 and S&P in 2011.

Moody’s warned that years of fiscal mismanagement have pushed debt levels to unsustainable heights, projecting federal debt could reach 134% of GDP by 2035, up from 98% last year. Despite the downgrade, the firm noted the U.S. still retains significant economic strengths, including the global dominance of the U.S. dollar.

The White House sharply criticized the move, blaming past leadership and questioning Moody’s credibility, with spokesman Kush Desai stating the agency “stayed silent during the last four years of fiscal disaster.” The downgrade coincided with a major political setback, as former President Trump’s spending bill failed to pass the House Budget Committee. Meanwhile, economic data revealed a 0.3% contraction in GDP for the first quarter, a sharp reversal from the previous quarter’s 2.4% growth.