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President Donald Trump offered a false characterization of the state of the U.S. economy in a rant against Federal Reserve Chair Jerome Powell, claiming that nonexistent improvements to the country’s credit rating should result in interest rates being lowered.
Trump has frequently pushed Powell to lower interest rates, flouting past presidents’ respect for the independence of the Federal Reserve.
Trump, who didn’t mention Powell by name, wrote in a Truth Social post that the Fed chair was “DEMEAN[ING] THE GREAT CREDIT OF THE USA” by refusing to lower interest rates.
“We are now, again, the Number One Credit in the World!” Trump claimed, calling the supposed return a “gigantic comeback.”
The “fed rate should be reflective of this,” Trump added.
In fact, the U.S. does not have the top-rated credit line in the world, and there hasn’t been a “comeback” since Moody’s downgraded the country’s credit rating in May.
The U.S. still has a stellar credit rank, but Moody’s rates it an AA1 — the second-highest measure possible. Meanwhile, 11 other countries, including Australia, Denmark, and Canada, as well as the European Union, have AAA ratings, the highest measure Moody’s gives out.
Moody’s made the downgrade to the U.S. credit rating due to longstanding rising debt levels, but also because of uncertainty stemming from tax cuts in Trump’s so-called “Big Beautiful Bill.” At the time, the proposed legislation was projected to add $2.5 trillion to the nation’s debt due to massive tax breaks for the wealthy. (The latest estimate by the Congressional Budget Office predicts that the law will add $3.4 trillion to the national debt.)
Sovereign credit ratings assess how strong a country’s credit is — that is, how high of a risk exists with investing in its debt. The U.S., with its AA1 rating, is still deemed a good creditor, but with its downgrade in May, was no longer viewed as the “gold standard” country by Moody’s, for the first time in over a century.
Lower credit ratings can affect consumers — lenders giving loans to the U.S. may ask for a higher interest rate, which can get passed on to consumer lending markets, which include loans on cars, homes and other types of lending.
Other economic policies pushed by Trump will also directly affect consumers, including his constantly shifting tariff policies.
Earlier this week, Trump announced that he would impose a hard deadline for countries to make trade “deals” benefiting the U.S., stating that there would be no more extensions beyond the end of this month.
“TARIFFS WILL START BEING PAID ON AUGUST 1, 2025,” Trump wrote on Truth Social.
He also announced on Thursday that he would place new tariffs on Canadian goods, up to 35 percent, and said tariffs with other U.S. trading partners could also soon go up.
Though Trump often claims that the countries themselves would pay the tariffs, they are actually paid for by consumers, as companies simply raise their prices in order to cover the increased costs — effectively making those tariffs a tax on Americans.
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