By Sama Marwan,
New York, USA – Moody’s Investors Service has lowered the long-term credit ratings of several major U.S. lending banks, including JPMorgan Chase, Bank of America, and Wells Fargo. This action follows Moody’s removal of the United States from the club of top-rated (AAA) countries due to its growing national debt, which stands at $36 trillion.
CNBC reported on Tuesday that Moody’s also downgraded the long-term deposit ratings of Bank of America, JPMorgan Chase, and Wells Fargo from Aa1 to Aa2. Additionally, the agency lowered the long-term counterparty risk ratings for certain rated subsidiaries and branches of Bank of New York Mellon and State Street from Aa1 to Aa2.
The sovereign credit rating downgrade on Friday triggered a wave of volatility in global markets. This occurred on the same day that a tax bill introduced by U.S. President Donald Trump failed to overcome a key procedural hurdle, as hardline Republicans sought larger spending cuts.
The bill had been approved by a key congressional committee on Sunday, marking a victory for Trump and House Speaker Mike Johnson.
In a note, Moody’s stated that the downgrade of the U.S. credit rating reflects a diminished ability of the country to support the obligations of these highly-rated banks.
