U.S. Credit Downgrade Sparks Market Debate Amid Economic Tensions – Coincu

Kevin Hassett, Director of the National Economic Council, criticized Moody’s decision to downgrade the U.S. credit rating from Aaa to Aa1 on May 19, 2025.

Moody’s Ratings has shifted the U.S. credit rating from Aaa to Aa1, sparking significant debate. Kevin Hassett, NEC Director for the Trump administration, described the action as “backward-looking,” pointing to the perceived budgetary missteps of the Biden era as the cause of financial strain. U.S. Treasury Secretary Scott Bessent echoed these sentiments, attributing fiscal issues to past federal expenditures.

U.S. Credit Downgrade Triggers High-Level Critiques

This move by Moody’s has prompted reactions, with Hassett labeling it “backward-looking” and maintaining that U.S. Treasury bonds remain unrivaled in safety, while emphasizing the Trump administration’s aim to reduce spending.

Market reactions have been watched closely, but immediate disruptions remain minimal, with Treasury bonds upholding their status as the world’s risk-free asset benchmark. Despite this, Kevin Hassett asserted that no country’s bonds compare to U.S. offerings, emphasizing optimism for economic growth under the Trump administration. The crypto market remains largely unmoved, with analysts noting steadiness amid the shift.

“Make no mistake, the US debt is the safest bet on Earth. There’s no country that I’d rather have than the United States and so Moody’s can do what it wants to. It’s a backward-looking thing, penalizing us for all the reckless spending of the Biden administration.” — Kevin Hassett, National Economic Council Director, Trump Administration.

Financial Markets Hold Steady: Expert Opinions and Historical Parallels

Did you know? The last major U.S. credit downgrade in 2011 led to initial volatility but eventually reinforced U.S. Treasuries as a global safe-haven, suggesting the enduring resilience of these financial instruments even amidst economic apprehension.

As of the evening of May 19, 2025, Bitcoin (BTC) stands at $104,993.53, boasting a market cap of formatNumber(2085847709352, 2). Trading volume surged by 56.79% in the past 24 hours to reach formatNumber(67244499353, 2), while price movements show a 23.35% rise over 30 days. Data by CoinMarketCap confirms these market metrics.

Expert insights suggest potential for gradual stabilization within financial markets despite the rating shift. This perspective is grounded in the robustness seen in historical trends where U.S. Treasuries remain highly favored during uncertainties, according to research from the Coincu team.