Moody’s May 2025 downgrade of U.S. sovereign debt to Aa1 from Aaa, shifting its outlook to stable and aligning all three major agencies at AA+/Aa1 with stable outlooks, underpins the 80% market-implied odds against another downgrade before 2027. Elevated debt-to-GDP near 124% and interest-to-revenue ratios exceeding peer medians are already reflected in current ratings, while the dollar’s reserve-currency status and deep Treasury market liquidity continue to anchor assessments. Congressional Budget Office projections indicate persistent yet gradual deficit widening through 2026, without the abrupt fiscal deterioration or governance shocks that would prompt further agency action. The 2025 debt-ceiling increase has eased near-term pressures, and 2026 budget negotiations appear unlikely to materially alter outlooks ahead of year-end.