Moody's Investors Service downgraded on Friday the United States government's credit rating from its highest AAA to AA1 for the first time in modern history.This development comes against the…

Moody's downgrades U.S. credit rating to Aa1 amid rising debt, deficits, and long-term fiscal risks.

The downgrade of the U.S. sovereign credit rating Friday will likely mean higher borrowing costs on mortgages.

It's the latest reminder that the government's ever-rising debt comes with real risks.

Investing.com -- Fitch Ratings has downgraded Close Brothers (F:CBRO) Group PLC (LON:CBRO) and its operating bank Close Brothers Limited to ’BBB’ from ’BBB+’ with a Negative outlook, removing them from Rating Watch Negative. The downgrade reflects challenges to Close Brothers’ business model, which has faced pressure from uncertainty surrounding the review into historical motor finance commission arrangements. This uncertainty is expected to continue into 2026, as the Financial Conduct Authority (FCA) plans to consult on a customer redress scheme by late 2025. Fitch noted that the removal from Rating Watch Negative reflects reduced immediate risks following a UK Supreme Court ruling that narrowed the legal basis for customer redress. The rating agency cited weakened financial performance due to lower business volumes and loan growth, along with multiple business disposals that have reduced the group’s scale and diversification. Recent disposals include Winterflood (securities trading), a brewery business, and retail premium finance operations, following the earlier sale of its asset management business. The Negative outlook reflects uncertainties around the group’s restructuring, the potential impact of the FCA’s redress scheme, and risks to profitability and capital. Close Brothers’ asset quality is weaker than peers, with an impaired loans ratio of 7.6% at the end of January 2025, up from 7.1% at the end of the previous fiscal year. Even excluding highly provisioned Novitas loans, the ratio would still be over 5% by the end of FY26. Fitch expects operating profitability to remain under pressure below 1.5% of risk-weighted assets in FY25-FY26, weaker than pre-FY23 performance due to tighter margins, higher costs, and potential redress expenses. The sale of Winterflood is expected to provide a 30 basis point increase to Close Brothers’ common equity Tier 1 (CET1) ratio upon completion, with the pro-forma CET1 ratio increasing to 14.3% based on end-April 2025 financials. Fitch estimates that an additional £100 million in redress costs would reduce the CET1 ratio by about 100 basis points. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. With valuations skyrocketing in 2024, many investors are uneasy putting more money into stocks. Sure, there are always opportunities in the stock market – but finding them feels more difficult now than a year ago. Unsure where to invest next? One of the best ways to discover new high-potential opportunities is to look at the top performing portfolios this year. ProPicks AI offers 6 model portfolios from Investing.com which identify the best stocks for investors to buy right now. For example, ProPicks AI found 9 overlooked stocks that jumped over 25% this year alone. The new stocks that made the monthly cut could yield enormous returns in the coming years. Is CBRO one of them?

Investing.com - U.S. officials have limited policy responses should a recent Moody’s downgrade of U.S. credit spark a sell-off in government bonds, according to analysts at Citi. In a note to clients, the analysts argued that "there are few if any" actions available to the Federal Reserve or Treasury Department in the event of a spike in U.S. Treasury yields in the wake of the decision by Moody’s. "The Fed needs a higher unemployment rate before they take action and re-start the easing cycle, and Treasury has limited room to cut issuance sizes," the analysts wrote. On Monday, U.S. Treasury yields eased back somewhat from an initial jump, but remain at elevated levels. Moody’s announced late last week that it had lowered its rating of U.S. credit by one notch to "Aa1" from "Aaa", citing concerns that debt and interest in the country are "significantly higher than similarly rated sovereigns". The U.S. currently faces a $36.22 trillion debt pile, according to the Treasury Department. In a statement, Moody’s added that "successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs". While there is room for a move higher in Treasury yields, which typically move inversely to prices, the downgrade "should not have much impact in isolation", the Citi analysts said. The rating cut could reignite fears around foreign demand for U.S. assets, which contributed to a sell-off in April in the wake of President Donald Trump’s announcement of punishing "reciprocal" tariffs, the analysts also flagged. However, recent data pointed to some resilience in foreign demand for Treasuries heading into April, they noted. Foreign demand was also "pretty much unchanged" after a lowering of the rating for U.S. Treasuries in 2023 by Moody’s-peer Fitch, the strategists said.

U.S. stocks end higher as investors digest Moody's U.S. credit downgrade  MarketWatch

Tech Stocks Volatility After US Credit Downgrade  Bloomberg.com

Dow Jones futures dropped Monday on Moody's downgrade of the U.S. credit rating. Apple, Nvidia and Tesla sold off on the stock market today. The post Dow Jones Futures Slide On U.S. Credit Downgrade; Apple, Nvidia, Tesla Sell Off appeared first on Investor's Business Daily.

Moody’s has downgraded the US credit rating from Aaa to Aa1, citing rising debt, fiscal deficits, and growing interest payment burdens.