China Calls on U.S. to Act Responsibly After Moody’s Credit Downgrade
China has called on the United States to implement sound and responsible economic strategies following Moody’s recent downgrade of the U.S.’s last remaining triple-A credit rating.
At a Monday press briefing, a spokesperson for China’s foreign ministry urged Washington to pursue prudent fiscal policies to uphold global financial stability and protect investor interests, according to Reuters.
The appeal came after Moody’s lowered the U.S. sovereign credit rating from ‘AAA’ to ‘Aa1’, citing persistent budget deficits and increasing interest expenses. The agency also highlighted concerns over ongoing political stalemates and weak fiscal discipline, which it warned could threaten long-term financial security.
Analysts at Vital Knowledge responded to the downgrade by questioning the delay, pointing out that Fitch downgraded the U.S. in 2023 and S&P did so over a decade ago in 2011. They noted that the U.S. deficit remains alarmingly high despite full employment and no ongoing war, which they see as a red flag.
Moody’s had upheld the top-tier U.S. credit rating since 1917, making this downgrade symbolically significant. While immediate repercussions in the Treasury market may be muted, the move casts renewed doubt on America’s fiscal management.
Financial markets reacted swiftly, with U.S. stock futures tumbling early Monday. As of 04:00 ET (08:00 GMT), Dow Jones Futures were down 398 points (0.9%), the S&P 500 Futures declined 70 points (1.2%), and Nasdaq 100 Futures dropped 306 points (1.4%).
