In May 2025, the Pension Fund Managers of Hong Kong had raised the concern of potential forced selling on their treasury holdings after a downgrade by Moody’s Ratings of US debt. Moody’s Investors Service, a global provider of credit ratings, research, and risk analysis provide the Moody Ratings which are credit ratings and risk assessments. Now, Japan’s Rating and Investment Information company has come up with a respite for the Pension Fund Managers. The company said that it will stick with its triple-A credit rating for the Treasurys despite the fact that the three major global rating agencies have downgraded the debt. Also, there are concerns that that U.S.A President Donald Trump’s fiscal package will inflate the government deficit.
What is the triple-A credit rating for the Treasurys?
The triple-A credit rating is the highest credit card rating, signifies a high level of creditworthiness and also indicates a low risk of default. The rating agencies Standard and Poor’s (S&P) and Fitch Ratings use the triple-A credit rating to rate the bonds with the highest credit quality. Additionally, the bonds with the AAA rating are considered to be the safest investment options for the investors.
Why USA’s triple-A credit rating was downgraded?
The USA’s triple-A credit rating was downgraded reportedly due to concerns about rising government debt, increasing interest costs, and political gridlock related to fiscal policy and debt ceiling negotiations. The downgrade in the USA’s triple-A credit card rating can have negative consequences for the country. This can increase borrowing costs for the government and potentially impact the USA’s economy. Also, the downgrade in the triple-A credit card rating can decrease the investor confidence and also raise concerns about the country’s long-term financial stability.
