Treasury Secretary Scott Bessent believes that Moody's is a lagging indicator and that the large and beautiful tax bill may exacerbate deficit pressure.
Due to investors' concerns over the U.S. debt issue, the new budget proposal that is about to be passed, and the ongoing escalation of trade conflicts, global asset prices showed significant fluctuation at the beginning of this week. After a sharp fall in the early trading session on Monday, the U.S. stock market gradually stabilized. The S&P 500 index was nearly flat at 2 PM, having once dropped nearly 1% in the early session. The Nasdaq index rebounded to last Friday's closing level after initially falling 1.3% at the opening.
The cryptocurrency market is also affected. Bitcoin fell in the early hours of Monday, but by the afternoon it had rebounded, recovering some of its losses, with a trading price slightly above $105,000, down about 1% from Sunday’s high.
One of the triggers of market turmoil is Moody's announcement after Friday's close to downgrade the U.S. government's credit rating from the highest level of AAA to Aa1, indicating a slight increase in risk. This move is widely seen by analysts as the main reason for the decline in the stock market during Monday's early trading and the rise in U.S. Treasury yields.
Moody's attributed this rating downgrade to the expanding fiscal deficit in the United States and the rising burden of debt interest. In fact, two of the three major credit rating agencies in the United States had previously made the same decision; S&P 500 Global Ratings downgraded its rating in 2011, and Fitch Ratings also issued a downgrade in 2023.
The second market trigger is Trump’s introduction of the Big, Beautiful Tax Bill, which is being questioned by both the House of Representatives and the Senate. This bill is believed to increase the federal deficit and is currently under revision to gain support from both chambers. Below is an analysis summary report.
Analysts believe that Moody's downgrade will only cause short-term market fluctuations.
Market analysts believe that Moody's rating adjustment should be viewed rationally. DataTrek Research co-founder Nicholas Colas pointed out that Moody's downgrade may trigger short-term market fluctuations, but historically, this does not equate to a structural rise in interest rates, an impending economic recession, or a long-term downturn in the stock market.
He added that credit rating agencies play an important role in capital markets, but their assessment of U.S. sovereign debt cannot accurately predict the future price trends of digital assets.
The White House seems to be unconcerned about this news. Treasury Secretary Scott Bessent stated in an NBC interview this morning that Moody's is a Lagging Indicator (.
The large and beautiful tax bill may increase the federal deficit, and the bill is undergoing revisions.
The "Great and Beautiful Tax Act" strongly promoted by the Trump administration received votes from some key committee members in the House of Representatives on Sunday. This bill is unanimously considered by bipartisan experts to further increase the federal deficit over the next decade. House Speaker Mike Johnson stated that in order to gain support from fiscal conservatives within the Republican Party, some revisions have been made to the bill's content. House Budget Committee Chairman Jodey Arrington revealed that the bill's content is still under ongoing negotiations, and the House is expected to vote as early as Thursday.
Moody's, as one of the three major international credit rating agencies, has long been regarded as an important reference for global investors to measure risk with its credit ratings of sovereign countries. Founded in 1909, Moody's rating system provides standardized risk measurement tools for the debt market, especially after the rapid development of international financial markets, its assessment of sovereign credit has been seen as a key variable in international capital flows and borrowing costs.
The United States has maintained its highest AAA credit rating for a long time, symbolizing confidence in the global capital markets. However, since Standard & Poor's first downgraded the U.S. rating in 2011, the U.S. credit rating has begun to waver. Moody's follow-up this time symbolizes an increased market concern over the uncertainty of the U.S. federal government's deficit and policies. Although the short-term impact on asset and market prices is limited, in the long term, if the rating continues to be downgraded, it may continue to increase government borrowing costs and impact the status of the United States as a "global risk-free asset."
In this article, Finance Minister Scott Bessent believes that Moody's is a lagging indicator and that the large and beautiful tax legislation may exacerbate deficit pressure, first appearing in Chain News ABMedia.
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Treasury Secretary Scott Bessent believes that Moody's is a lagging indicator and that the large and beautiful tax bill may exacerbate deficit pressure.
Due to investors' concerns over the U.S. debt issue, the new budget proposal that is about to be passed, and the ongoing escalation of trade conflicts, global asset prices showed significant fluctuation at the beginning of this week. After a sharp fall in the early trading session on Monday, the U.S. stock market gradually stabilized. The S&P 500 index was nearly flat at 2 PM, having once dropped nearly 1% in the early session. The Nasdaq index rebounded to last Friday's closing level after initially falling 1.3% at the opening.
The cryptocurrency market is also affected. Bitcoin fell in the early hours of Monday, but by the afternoon it had rebounded, recovering some of its losses, with a trading price slightly above $105,000, down about 1% from Sunday’s high.
One of the triggers of market turmoil is Moody's announcement after Friday's close to downgrade the U.S. government's credit rating from the highest level of AAA to Aa1, indicating a slight increase in risk. This move is widely seen by analysts as the main reason for the decline in the stock market during Monday's early trading and the rise in U.S. Treasury yields.
Moody's attributed this rating downgrade to the expanding fiscal deficit in the United States and the rising burden of debt interest. In fact, two of the three major credit rating agencies in the United States had previously made the same decision; S&P 500 Global Ratings downgraded its rating in 2011, and Fitch Ratings also issued a downgrade in 2023.
The second market trigger is Trump’s introduction of the Big, Beautiful Tax Bill, which is being questioned by both the House of Representatives and the Senate. This bill is believed to increase the federal deficit and is currently under revision to gain support from both chambers. Below is an analysis summary report.
Analysts believe that Moody's downgrade will only cause short-term market fluctuations.
Market analysts believe that Moody's rating adjustment should be viewed rationally. DataTrek Research co-founder Nicholas Colas pointed out that Moody's downgrade may trigger short-term market fluctuations, but historically, this does not equate to a structural rise in interest rates, an impending economic recession, or a long-term downturn in the stock market.
He added that credit rating agencies play an important role in capital markets, but their assessment of U.S. sovereign debt cannot accurately predict the future price trends of digital assets.
The White House seems to be unconcerned about this news. Treasury Secretary Scott Bessent stated in an NBC interview this morning that Moody's is a Lagging Indicator (.
The large and beautiful tax bill may increase the federal deficit, and the bill is undergoing revisions.
The "Great and Beautiful Tax Act" strongly promoted by the Trump administration received votes from some key committee members in the House of Representatives on Sunday. This bill is unanimously considered by bipartisan experts to further increase the federal deficit over the next decade. House Speaker Mike Johnson stated that in order to gain support from fiscal conservatives within the Republican Party, some revisions have been made to the bill's content. House Budget Committee Chairman Jodey Arrington revealed that the bill's content is still under ongoing negotiations, and the House is expected to vote as early as Thursday.
Moody's, as one of the three major international credit rating agencies, has long been regarded as an important reference for global investors to measure risk with its credit ratings of sovereign countries. Founded in 1909, Moody's rating system provides standardized risk measurement tools for the debt market, especially after the rapid development of international financial markets, its assessment of sovereign credit has been seen as a key variable in international capital flows and borrowing costs.
The United States has maintained its highest AAA credit rating for a long time, symbolizing confidence in the global capital markets. However, since Standard & Poor's first downgraded the U.S. rating in 2011, the U.S. credit rating has begun to waver. Moody's follow-up this time symbolizes an increased market concern over the uncertainty of the U.S. federal government's deficit and policies. Although the short-term impact on asset and market prices is limited, in the long term, if the rating continues to be downgraded, it may continue to increase government borrowing costs and impact the status of the United States as a "global risk-free asset."
In this article, Finance Minister Scott Bessent believes that Moody's is a lagging indicator and that the large and beautiful tax legislation may exacerbate deficit pressure, first appearing in Chain News ABMedia.