Why Scott Bessent Calls Moody’s a ‘Lagging Indicator’ in the Wake of the U.S. Credit Downgrade

Treasury Secretary Scott Bessent recently shared his thoughts on Moody’s downgrade of the U.S. credit rating, calling it a “lagging indicator.” In an interview on NBC News’ “Meet the Press,” he mentioned that the downgrade from Aaa to Aa1 reflected rising government debt, which has been increasing for years. As of now, the U.S. national debt stands at an astonishing $36.22 trillion.

Bessent attributed the downgrade to the current administration’s spending, highlighting initiatives aimed at areas like climate change and healthcare. He emphasized that these financial trends didn’t appear overnight but have developed over the last few years, underlining a long-term issue rather than a recent one.

In another discussion, Bessent talked about Walmart’s approach to managing tariffs. He mentioned a conversation with Walmart’s CEO, Doug McMillon, who indicated that the retail giant would take on some of the tariff costs, echoing similar actions during previous years. According to Walmart’s CFO, customers might soon feel the impact of rising prices due to these tariffs.

Walmart responded to criticisms, stating they always strive to keep prices low. The company faces a delicate balance as they deal with slim retail margins while navigating these economic challenges.

On a broader scale, the White House is actively engaging with various countries to negotiate tariffs. Bessent noted that if some nations are unwilling to negotiate, tariff rates might revert to the original levels set earlier.

Interestingly, as Bessent addressed these issues, he faced criticism for downplaying the importance of the credit rating downgrade. Senator Chris Murphy pointed out that such downgrades could signal potential economic turmoil, including rising interest rates affecting everyday Americans looking to buy homes or start businesses.

The conversation around the U.S. credit rating is timely, given that the nation has experienced substantial debt growth over the past few decades. Historically, similar downgrades have led to economic consequences, increasing the urgency for policymakers to address these concerns.

Overall, the discussions reflect the complex interplay between government policies, corporate strategies, and the broader economy. More informed decisions can help steer the country toward a more stable financial future, something crucial for all Americans.



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