Trump suffers setbacks with historical relegation of the US credit note

Moody’s removed from the United States on Friday (17), the maximum grade of sovereign credit, ending a historical cycle started in 1919. The decision, motivated by the growth of public debt and the instability in the conduct of economic policy, deepens the credibility crisis of Donald Trump’s second term.

Relegation occurs amid impasses in Congress, failure of the fiscal agenda and divisions within the Republican Party itself.

With the measure, the US is no longer at the top of the classifications of the three main global risk agencies – Moody’s, Fitch and S&P – for the first time in over a century.

The new relegation, from AAA to AA1, was announced after the closing of the markets, but has already caused the income from the US Treasury titles and increased the caution among investors.

Moody’s justified the decision based on a combination of factors: persistent tax deficits, interest rates and absence of political consensus on sustainable measures.

“US economic and financial forces are no longer fully compensated for the decline of tax indicators,” the agency said in an official statement.

Government attacks an economist who did not participate in the decision

In reaction to relegation, the White House tried to turn the crisis into personal dispute. Trump’s spokesman Steven Cheung accused Moody’s Analytics economist Mark Zandi of being responsible for the measure and called him a “stretch critic” of the administration.

Zandi, however, did not participate in the processas Moody’s Analytics does not integrate the company’s rating division.

The attack highlights the strategy of trumping to delegitimize institutions and seeking external targets to avoid any self -criticism.

Instead of presenting alternatives or technical explanations, the government has chosen to hold independent analysts responsible, even without formal connection with the decision of Moody’s Ratings.

Trump Fiscal Project fails at the Republican base itself

Relegation occurs at a time of fragility of the Trumpist Fiscal Agenda. A project that intended to renew tax cuts approved in 2017 – nicknamed Trump from “Big Beautiful Bill” – was barred by parliamentarians from the Republican Radical Wing in the House of Representatives.

The proposal provided for $ 4 trillion in tax cuts, with shy compensations of US $ 1.5 trillion in expenses.

The Congress defeat has accentuated the government’s political wear and tear, which already faces estimated $ 2 trillion deficits and increasing pressures on debt service. Economists warn that the cuts would mainly benefit the richest and further aggravate the concentration of income in the country.

Relegation exposes fragility of US hegemony

Moody’s decision was made in a context of growing distrust in the US political and economic environment. The tense relationship between the Trump government and the Federal Reserve, the absence of articulation in Congress, and the intense disputes in the Republican Party have caused uncertainties between investors and analysts.

Experts consulted by international vehicles observe that the combination of tariff wars, unlawful deregulation and attacks on autonomous institutions compromises the predictability of economic decisions and removes strategic investors.

The broader tax package, which includes new tax reductions promised by Trump, also faces legislative obstacles. The blockade of the proposal by a House committee in the same week as relegation illustrated the government’s difficulties in consolidating its agenda.

The episode rekindles debates on the limits of the US fiscal model and the role of the dollar as safe assets in an international financial system increasingly tensioned by geopolitical disputes and internal instability in the US.