Moody’s has joined S&P and Fitch in downgrading US debt
For the first time in over 100 years, the US no longer has a AAA rating
US debt is projected to hit 134% of GDP by 2035
Interest and mandatory spending could reach 78% of the budget
30-year US bond yields briefly hit 5%
Higher borrowing costs could tighten global liquidity
Tariffs may push prices up, limiting Fed rate cuts
Result: Sticky inflation and structurally higher yields
US yields now rival Indian equities and debt
This narrows the investment case for foreign funds
India’s current account is stable, but capital flow volatility could trigger currency swings and tighter financial conditions