“DOGE is dead without making a dent (Elon out the door),
2) Lower than expected tariff revenues as Admin gets spooked their policies will cause a further slowdown so already talking down expectations to make sure a hawkish tariff regime doesn’t ensue. Need to build back confidence but less tariff revenues doesn’t help the budget situation
3) Senate looking to run tax cuts through reconciliation without any real spending cuts coming which will blow out the deficit even more (Trump 2.0 is the same as Trump 1.0)
4) Hard data holding up better than soft data because labor market remains tighter than normal due to immigration policies.
5) All this chaos means foreigners are still going to be looking to sell US$ assets (including USTs) and repatriate the capital home where they have developing domestic market spending narratives (defense, infrastructure, consumption)
If this is backdrop, how exactly is Bessent going to be getting 10y yields lower from here?”
https://x.com/ces921/status/1907458720713294279
Moody’s Signals Potential US Debt Downgrade
Moody’s ratings agency has warned it may downgrade US government debt in 2025, following similar moves by S&P and Fitch who already reduced US ratings from AAA to AA+. Moody’s currently maintains an AAA rating but with a negative outlook since 2023.
The agency is concerned about unchecked federal debt growth (now at 100% of GDP compared to 44% for other AAA-rated nations), rising interest costs, and declining debt affordability.
The situation appears likely to worsen as Congress prepares to pass Trump-backed tax cuts and extensions later this year. The Congressional Budget Office projects debt will reach 119% of GDP in 10 years and 136% in 20 years—and these projections don’t account for the pending tax cuts that could add $4-10 trillion more debt over the next decade.
https://finance.yahoo.com/news/another-us-debt-downgrade-could-be-coming-200236197.html