Moody's Downgrades US Credit Rating to Aa1: 30-Year Treasury Hits 5% — What It Means for Your Money

# Moody's Downgrades US Credit Rating to Aa1: 30-Year Treasury Hits 5% — What It Means for Your Money

> **Quick answer:** Moody's cut the US credit rating from Aaa to Aa1 on May 16 — the first downgrade in over 100 years — citing a federal deficit headed toward 9% of GDP and national debt on track to hit 134% of GDP by 2035. The 30-year Treasury yield briefly touched 5.01% Monday morning. Treasury Secretary Scott Bessent shrugged it off. But the bond market didn't.

*This article is for informational purposes only and does not constitute financial advice. Consult a qualified financial advisor for personal financial decisions.*

Moody's US credit rating downgrade 2026 just made history: for the first time since 1919, no major ratings agency gives the United States a perfect credit score. Moody's — the last holdout after S&P cut in 2011 and Fitch cut in 2023 — dropped the US from Aaa to Aa1 on Friday evening, May 16. By Monday morning, the 30-year Treasury yield hit 5.01% and European markets opened lower. Here is what happened, why it matters, and what it means for your mortgage, your 401(k), and your borrowing costs.

## What Moody's Said — and Why It's Historic

Moody's had held the United States at Aaa since 1917. That 108-year streak is now over.