White House Rebukes Moody’s Downgrade: Labels Analyst as Politically Biased

White House Rebukes Moody’s Downgrade: Labels Analyst as Politically Biased

The White House has issued a strong rebuttal to the recent credit rating downgrade of the United States by Moody’s, claiming the move was influenced by political bias. On May 16 (local time), White House Communications Director Stephen Cheung targeted Mark Zandi, Chief Economist at Moody’s Analytics, stating, “He has opposed President Donald Trump since 2016, and no one takes his analysis seriously.”

However, it's important to note that Moody’s Analytics is a separate entity from Moody’s Ratings, the official credit rating agency. Cheung’s remarks may reflect a misunderstanding or deliberate conflation of the two.

While some experts acknowledged the seriousness of America’s growing fiscal deficit, they questioned the timing of Moody’s downgrade. Joseph LaVorgna, former Chief Economist at the National Economic Council (NEC), told Bloomberg, “The timing of Moody’s announcement is highly questionable, and their revenue forecasts seem overly pessimistic.” He warned that fiscally conservative factions could exploit the downgrade for political leverage.

LaVorgna also highlighted how the failure of Trump’s large-scale tax cut proposals in Congress could be indirectly linked to the political undercurrents influencing Moody’s announcement.

Stephen Moore, an economist at the Heritage Foundation, denounced the downgrade as “absurd,” stating, “If U.S. government-backed bonds aren’t rated Aaa, then what assets possibly could be?”

This is not the first time credit rating agencies have come under fire. When Fitch downgraded the U.S. from AAA to AA+ in 2023, Wall Street leaders voiced similar skepticism. JPMorgan CEO Jamie Dimon said at the time, “It’s irrational to think that countries rated higher than the U.S. depend on America’s stability.” He used Canada as an example, insisting the U.S. remains “the most prosperous and safest country in the world.”

Echoing that view, Warren Buffett, Chairman of Berkshire Hathaway, commented on Fitch’s downgrade “There are things people shouldn’t worry about. This is one of them.”