Moody’s has issued a warning that President Trump’s tariff policies could weaken America’s economic strength and worsen concerns about the U.S. deficit.
The credit rating agency predicts these tariffs will negatively impact business investment, consumer confidence, and prevent interest rate cuts by the Fed.
Moody’s also noted that U.S. government debt affordability is significantly weaker than in previous decades, with the deficit projected to reach 8.5% of GDP within ten years.
While acknowledging the unique position of the U.S. dollar as a reserve currency, Moody’s suggests that fiscal weakening will likely continue even under favorable economic conditions, and the DOGE cost-cutting program is unlikely to deliver substantial savings quickly.