In response to Moody's downgrade of the United States' sovereign credit rating, Kevin Hassett, director of the White House National Economic Council (NEC), firmly rebutted, criticizing Moody's action as "outdated" and emphasizing that US Treasuries remain the world's safest investment choice.

Hassett pointed out that the Trump administration is focused on cutting federal spending and deregulation to enhance economic growth momentum. In an interview on Fox Business Network on Monday, he stated, "Without a doubt, US Treasuries are the safest investment in the world. I would rather hold US Treasuries than assets from any other country. Let Moody's do as they wish."

He further attributed Moody's downgrade to the fiscal policies of the previous Biden administration, calling it a punitive action against reckless spending during Biden's tenure. "We are cutting spending, easing regulations, and promoting supply-side growth, which will make the US economy the strongest in the world and bring about the highest quality of government bonds," Hassett added.

Last Friday, Moody's lowered the US credit rating from the highest "Aaa" to "Aa1", making it the last of the three major credit rating agencies to downgrade the US to a non-top tier rating. Moody's noted that the failure of past US governments and Congress to effectively address the massive fiscal deficit problem, along with a significant rise in federal interest expenditures, were the primary reasons for this downgrade.

In the wake of Moody's downgrade, US long-term Treasury yields rose sharply on Monday, with the 30-year Treasury yield briefly climbing 9 basis points to 5.03%, the highest level since November 2023; the 10-year Treasury yield also increased to 4.55%. According to the Government Accountability Office (GAO), US federal interest expenditures are expected to soar from $263 billion in 2017 to $1 trillion this year, reflecting rapidly deteriorating fiscal pressures.

Although the Trump administration proposed a plan to cut approximately $1.5 trillion in spending, the Republican-backed tax reform plan is expected to reach $4 trillion, which may further expand the fiscal deficit in the coming years. US Treasury Secretary Scott Bessent also expressed a similar viewpoint, deeming Moody's downgrade a "lagging indicator" and emphasizing that the government will work to improve fiscal conditions through spending cuts and stimulating economic growth.

Bessent had previously informed Congress that the Treasury's ability to use special accounting measures to address the debt ceiling could be exhausted by August, but downplayed the impact of Moody's downgrade. He stated, "We are determined to reduce spending and promote economic growth, which is the fundamental way to improve the nation's fiscal situation."