The downgrade follows a change in the outlook on the sovereign in 2023 due to wider fiscal deficit and higher interest payments, and comes as Congress debates tax and spending plans that could deepen the fiscal hole.

Moody’s Investors Service downgraded the U.S. sovereign credit rating from Aaa to Aa1, marking the first time all three major credit rating agencies—Moody’s, S&P, and Fitch—have rated U.S. debt below the top tier.