Trump administration brushes off credit downgrade as ‘lagging indicator’

The Trump administration is not alarmed by the recent downgrading of the nation’s credit.

Moody’s rating agency cut the nation’s credit rating from Aaa to Aa1, citing rising debt and interest payments.

“I think that Moody’s is a lagging indicator,” Treasury Secretary Scott Bessent said Sunday on NBC’s “Meet the Press.” “I think that’s what everyone thinks of credit agencies.”

Mr. Bessent pointed out that former Treasury Secretary Larry Summers, who served under President Bill Clinton, said the same thing when Moody’s downgraded the U.S. credit in 2011.

“We didn’t get here in the past 100 days,” Mr. Bessent said. “It’s the Biden administration and the spending that we have seen over the past four years that we inherited 6.7% deficit to GDP, the highest when we weren’t in a recession, not in a war.”

“And we are determined to bring the spending down and grow the economy,” he added.

Moody’s Ratings announced it had downgraded the U.S. credit rating on Friday.

“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,” Moody’s said Friday in a news release. “The U.S.’s fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns.”

The announcement came as President Trump looks to muscle his “one big, beautiful bill” through Congress, which budget hawks are rallying against.

The nonpartisan Committee for a Responsible Federal Budget estimates the package would cut spending by $1.6 trillion but increase debt by $3.3 trillion because of costly tax cuts and new spending on border security, defense and other policies.

The three major credit rating agencies no longer give the U.S. its top mark.

Standard & Poor’s downgraded the U.S. in 2011, and Fitch did so in 2023.

During an appearance on CNN’s “State of the Union,” Mr. Bessent said it is more important to focus on the trillions of dollars of promised business deals that Mr. Trump scored on his recent swing through the Middle East.

“We are seeing confidence from investors,” the Treasury secretary said. “So, I don’t put much credence in the Moody’s [downgrade].”

House Speaker Mike Johnson said the credit downgrade underscores the importance of passing President Trump’s agenda, including “historic spending cuts,” through Congress.

“Moodys is not incorrect,” Mr. Johnson, Louisiana Republican, said on “Fox News Sunday.” “It emphasizes the very need for the legislation we are talking about.”