06:15 AM EDT, 05/19/2025 (MT Newswires) -- Moody's said Friday it has downgraded the US government's long-term issuer and senior unsecured ratings to Aa1 from Aaa and revised the outlook to stable from negative.

The downgrade factors in the increase over more than 10 years in government debt and interest payment ratios to levels that are "significantly higher" than similarly rated sovereigns, the ratings agency said.

"Successive US 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. "We do not believe that material multiyear reductions in mandatory spending and deficits will result from current fiscal proposals under consideration."

The ratings agency expects larger deficits over the next 10 years as entitlement spending grows while government revenue remains "broadly flat," it said. "In turn, persistent, large fiscal deficits will drive the government's debt and interest burden higher. The US' fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns."