Mon May 19 09:30:00 UTC 2025: ## US Treasury Yields Spike After Moody’s Downgrades Credit Rating
**New York, NY -** U.S. Treasury yields surged on Monday following Moody’s decision to downgrade the nation’s credit rating, citing concerns over rising government debt and the cost of financing the budget deficit. The move from Aaa to Aa1, announced Friday, has rattled investors and triggered a sell-off in government bonds.
As of 4:46 a.m. ET, the 30-year Treasury yield climbed over 10 basis points to 5.021%, while the 10-year yield also rose by 10 basis points, reaching 4.542%. The 2-year Treasury yield saw a smaller increase of over 2 basis points, reaching 4%. Yields and prices move inversely.
Moody’s explained the downgrade was due to the increasing burden of financing the government’s budget deficit and the high cost of refinancing existing debt in an environment of elevated interest rates. “This one-notch downgrade on our 21-notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns,” the agency stated.
While Moody’s had maintained the U.S. at its top rating since 1949, this downgrade brings them in line with other major credit rating agencies that already hold the U.S. at their second-highest available rating.
“This is a major symbolic move as Moody’s were the last of the major rating agencies to have the US at the top rating,” analysts at Deutsche Bank noted in a report.
The downgrade comes amid broader economic uncertainty, including concerns about potential reciprocal tariffs and the U.S. debt burden, prompting questions about whether U.S. Treasurys remain a reliable safe haven asset.
Investors will be closely monitoring upcoming speeches from key Federal Reserve officials on Monday, including Atlanta Fed President Raphael Bostic, New York Fed President John Williams, and Dallas Fed President Lorie Logan, for further insights into the central bank’s monetary policy outlook.
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