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.

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.

Moody's Ratings downgraded U.S. debt, becoming the last of the three major credit rating agencies to move in that direction.