Moody's recent downgrade of the US credit rating from AAA to Aa1 marks the culmination of a decade-long process influenced by fiscal and political factors.

The downgrade follows a change in the outlook on the sovereign in 2023 due to wider fiscal deficit and higher interest payments, and comes as Congress debates tax and spending plans that could deepen the fiscal hole.

The financial ratings firm lowered the U.S. credit rating from the gold-standard Aaa to Aa1. It said it expected federal deficits to widen, mostly due to increased interest payments on debt, rising entitlement spending and relatively low revenue generation.