Home Economy Moody’s US downgrade may curb Trump tax cuts, but bond markets stay calm, for now
Economy - May 20, 2025

Moody’s US downgrade may curb Trump tax cuts, but bond markets stay calm, for now

Moody’s US downgrade may curb Trump tax cuts, but bond markets stay calm, for now

Moody's downgrade of US debt, while unlikely to cause immediate market turmoil, may curb Trump's tax cut ambitions. The US debt-to-GDP ratio is high, but manageable, supported by the dollar's dominance and demand from export-surplus nations. However, bond markets are wary of US fiscal policy, and Congress may temper Trump's economic agenda in response to concerns.

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