How will Moody’s downgrade of US debt affect mortgage rates?
Housing Wire
MAY 18, 2025
To add to the list of dramatic events in 2025, Moodys downgraded U.S. credit by one notch on Friday from Aaa to Aa1 raising concerns about mortgage rates. Moodys pointed to increasing debt and interest payment ratios notably higher than those of comparable sovereign nations. This downgrade has sparked a range of reactions among market participants, with some suggesting that it may be politically motivated, given the timing and challenges facing the Republican budget and tax cuts.
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