China on Monday called on the United States to adopt responsible fiscal policies in response to Moody’s downgrade of the U.S. sovereign credit rating, warning that instability in the world’s largest economy could have ripple effects across global financial markets.
The remarks, made by a Chinese foreign ministry spokesperson at a regular press briefing, emphasized the importance of safeguarding international investor interests and maintaining economic and financial stability.
The comments come days after Moody’s Investors Service cut the U.S. credit rating by one notch, citing the ballooning $36 trillion national debt and persistent fiscal deficits. The move has added to investor unease amid already rising bond yields and increased volatility in U.S. Treasuries.
Moody’s was the last of the three major ratings agencies to act, following Fitch’s downgrade in 2023 and Standard & Poor’s in 2011. The agency warned that repeated failures by successive U.S. administrations to rein in budget deficits and growing interest costs were key factors behind the decision.
In Washington, the downgrade has reignited the debate over fiscal responsibility. Republican lawmakers are advancing a sweeping tax-and-spending bill, dubbed the “Big Beautiful Bill”, which analysts say could add trillions more to the national debt if key provisions are extended. Meanwhile, the White House has dismissed the downgrade as politically driven, accusing Moody’s of bias and defending its economic agenda.
Markets are now focused on the looming debt ceiling deadline, with Treasury bills maturing in August offering unusually high yields, a sign that investors are concerned about a potential default if lawmakers fail to act.
