Definition
A grade from an agency such as S&P Global, Moody's or Fitch on how likely a borrower is to repay its debt.
The story
On S&P's and Fitch's scales, ratings run from AAA, the top, down through grades like BBB to D, for default. In May 2025 Moody's lowered the US rating one notch to Aa1 from Aaa, after S&P did so in 2011 and Fitch in 2023, leaving the US without a top rating from any of the three.
Why markets watch it
A downgrade can raise a borrower's costs, so rating changes move bond markets.
Connects to
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms