The downgrade follows a change in the outlook on the sovereign in 2023 due to wider fiscal deficit and higher interest payments, and comes as Congress debates tax and spending plans that could deepen the fiscal hole.

US stocks took a hit on Monday while Treasury yields rose as Wall Street processed Moody's downgrade of the US credit rating alongside developments in President Trump's tariff salvos. Moody’s cut the US government’s long-term credit rating from AAA to AA1 late Friday,