US Lost Last AAA: Reason for Pullback? Will Investors Keep Buying the Dip?
The US lost its last AAA credit rating. Moody’s Ratings downgraded the U.S. government's credit rating on Friday, citing the country’s massive fiscal deficit and rising interest costs. Moody’s cut the US rating to Aa1, placing it on par with countries like Austria and Finland.
The timing of the downgrade is particularly sensitive.
Earlier that day, the House Budget Committee failed to pass a large-scale tax reform plan backed by Trump due to resistance from hardline Republicans.
The proposal, aimed at extending the tax cuts introduced by the Trump administration in 2017, is dubbed “The One, Big, Beautiful Bill”—but it’s projected to increase the
deficit by $3.72 trillion over the next decade.
Trump Camp Dismisses the Downgrade: Is It Really That Big of a Deal?
When asked about Moody’s downgrade last Friday, Trump advisor Bessent commented:
“Moody’s is a lagging indicator — that’s how everyone views credit rating agencies.”
Back in 2012, Trump criticized Obama, warning that the U.S. would face another credit downgrade. But in the end, the boomerang came back to hit him.
Wall Street Analysts: Downgrade Offers a Reason for Market Pullback
Moody’s noted that the unchecked budget deficit means U.S. government borrowing will accelerate significantly.
Over the past decade, the ratio of U.S. government debt and interest payments to revenue has steadily increased, now far surpassing other sovereigns with similar ratings.
By 2035, federal interest payments are projected to account for about 30% of fiscal revenue — up sharply from 18% in 2024 and 9% in 2021.
Moody’s action further highlights the complex risks facing U.S. markets.
The $US10Y(US10Y.BOND)$ rose to 4.547%.
The $US30Y(US30Y.BOND)$ broke 5%.
The $US2Y(US2Y.BOND)$ reached 4%.
Can Retail Investors Keep “Buying the Dip”?
Despite a seemingly fragile stock market, retail investors remain aggressive buyers. Since April 8, retail investors have poured a record $50 billion into U.S. equities.
In fact, retail investors’ share of the stock market surged to 36% in late April, an all-time high and well above the 10-year average of 12%.
Do retail investors still have the cash — and the nerve — to keep buying the dip?
How do you view Moody’s downgrade?
Is a big pullback coming for US stocks and bonds?
Will you sell and hold the cash? Or keep holding?
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@Universe宇宙
hold till Trump exitssssss... needs endurance to walk this journey.... look what you have done Trump... [OMG] [OMG] [OMG] [Gosh] [Gosh] [Gosh]
Moody’s Ratings downgraded the U.S. government's credit rating on Friday, citing the country’s massive fiscal deficit and rising interest costs. Moody’s cut the US rating to Aa1, placing it on par with countries like Austria and Finland.
The timing of the downgrade is particularly sensitive.
Do retail investors still have the cash — and the nerve — to keep buying the dip?
How do you view Moody’s downgrade?
Is a big pullback coming for US stocks and bonds?
Will you sell and hold the cash? Or keep holding?
leave your comments to win tiger coins~
That said, I don’t think this marks the start of a major downturn. Retail investors have shown strong buying interest, and I still see opportunities, especially in quality stocks tied to long-term growth themes like AI and tech.
For now, I’m holding my positions and continuing with dollar-cost averaging. I’ll stay cautious and keep an eye on bond yields, but I’m not shifting to cash unless the market shows deeper signs of stress.
@Tiger_comments @TigerStars
As an investor, it is important for me to reassess my risk appetite and perhaps shift my capital from riskier assets like growth stocks to more defensive stocks such as consumer staple stocks.
It is also a good opportunity to buy quality stocks such as the Magnificent 7 and hold long term.
Volatility is the price that I am willing to pay for long term gains.
@Tiger_comments @TigerStars @Tiger_SG @CaptainTiger @TigerClub
Rating? How transparent Moody's is! I believe they themselves have insider trading.
Who audited them? They are also a group of people that have been paid to write.
過去十年，美國政府債務和利息支付佔收入的比例穩步上升，目前已遠遠超過其他評級相似的主權國家。
通過2035,聯邦利息支付預計將佔約佔財政收入的30%——較2024年的18%和2021年的9%大幅上升。