"The U.S. just received a downgrade to its credit rating; should you worry?
A few weeks ago, Moody's announced it downgraded the United States' sovereign credit rating from AAA to Aa1. While a downgrade is important to understand and can have negative consequences for interest rates, this downgrade didn't seem too problematic. I mainly say that because Moody's was the last major credit rating agency to have the U.S. at the highest possible rating. The first downgrade carried the most weight, in my opinion, as it had the highest shock value- Standard & Poor's was the first to move in August 2011, and the stock market fell 6.66% the session after the announcement. Fitch then lowered its rating on U.S. debt in August 2023, and the stock market lost 1.38%. After this Moody's downgrade, the stock market seemed to have little reaction and actually had a small increase following the news. While this downgrade may sound scary, I don't believe it will have long-term consequences considering that U.S. debt is still viewed as a very safe asset. That said, the U.S. does need to address the growing deficit problem as further downgrades from these credit agencies could cause problems."
Reference: Brent Wilsey, Wilsey Asset Management