See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium.  CLICK HERE to learn more and start your trial.

“Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs.” – Moody’s, 5/16/25

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

After being the lone holdout with a AAA credit rating on the sovereign debt of the US, on Friday evening, Moody’s joined Standard and Poor’s and Fitch in downgrading US debt. As you might expect, equity futures are lower and interest rates are higher in response to the news. As Moody’s noted in its statement, the downgrade is the result of ‘successive US administrations’, and the buildup of debt in the US has been a long-running issue. The news, therefore, is surprising to no one, but it still reinforces the problem and brings it to the forefront.

The chart below shows the 10-year US Treasury yield dating back to 2010, with each AAA downgrade notated on the chart. In the case of both the S&P and Fitch downgrades, the actions did little to change the trend in interest rates. When S&P downgraded US debt in 2011, yields were already falling and continued to decline, whereas the Fitch downgrade in 2023 came in the middle of a period when rates were rising. So, while each action garnered headlines, the ratings agencies didn’t tell us anything the market didn’t already know.