Treasury Secretary Scott Bessent addressed the recent downgrade from Moody’s, which lowered the United States’ credit rating from Aaa to Aa1, during an interview on NBC News’ “Meet the Press.” He described Moody’s ratings as a “lagging indicator,” asserting that such assessments often reflect issues that have developed over time. The downgrade is attributed to an increase in government debt and interest payment ratios that now exceed levels seen in comparable sovereign nations.
Bessent linked the credit rating reduction to the spending priorities of the Biden administration, including investments in climate change initiatives and healthcare expansion. He emphasized that the current debt accumulation has been a gradual process over many years, not solely a result of recent policies. According to the Treasury Department, the U.S. national debt has reached $36.22 trillion, showing a significant climb since the 1980s, continuing through both President Trump’s and President Biden’s terms.
In relation to trade and tariffs, Bessent spoke about his conversation with Walmart CEO Doug McMillon, revealing that Walmart would absorb some of the tariffs, similar to their actions in previous years. Acknowledging the pressures on consumer prices from tariffs, he defended Walmart’s position, stating that they aim to keep prices low despite small margins. The discussion also included the White House’s ongoing negotiations over tariffs with various countries, emphasizing that companies are expected to prepare for worst-case scenarios when reporting to investors.
Bessent addressed comments made by former President Trump regarding a luxury jet from Qatar being proposed as Air Force One, defending the trip’s investment commitments as ultimately beneficial for the American people. He remarked that reactions to the proposed jet overlook the broader financial gains being negotiated in the Middle East.
Senator Chris Murphy criticized Bessent’s dismissal of the credit downgrade’s significance, warning that it could lead to a recession and increased interest rates for potential business owners and homebuyers. This reflects concerns about the economic implications of the current administration’s policies and their long-term effects on American households and businesses.
Overall, while the situation presents challenges, it also underscores the importance of sound fiscal policies and international negotiations that could lead to future economic stability. The continuous dialogue around tariffs and investments suggests a commitment from various stakeholders to navigate these complexities effectively.