Moody’s May 2025 downgrade of U.S. sovereign debt to Aa1 with a stable outlook aligned all three major agencies at one notch below their top ratings, establishing the core driver behind the 76% market-implied probability of no further downgrade before 2027. Persistent deficits and debt exceeding $39 trillion continue to weigh on fiscal metrics, yet recent debt-ceiling legislation, absence of negative watches, and steady agency outlooks through mid-2026 have limited downside risks. Traders betting real capital on these aggregated probabilities view the current equilibrium as durable absent acute political impasses or sharper deterioration in debt-service ratios relative to GDP. Key near-term catalysts include any shifts in FOMC policy or congressional fiscal negotiations that could alter rating-agency assessments.