WASHINGTON (FT) - 
Treasury secretary Scott Bessent told NBC that the Moody’s downgrade was “a lagging indicator”, blaming the fiscal situation on the Biden administration. He added that the administration was “determined to bring the spending down and grow the economy”. 
He previously said he would cut the deficit to 3 per cent by the end of Trump’s term. But Gopinath noted that U.S. debt to GDP was “ever-increasing”, adding: “It should be that we have fiscal policy in the U.S. that is consistent with bringing debt to GDP down over time.” 
The federal government debt held by the public amounted to 98 per cent of GDP in fiscal 2024, compared with 73 per cent a decade earlier, according to the Congressional Budget Office. 
Although the IMF said last month that it expected the U.S. fiscal deficit to fall this year as long as tariff revenues grew, those projections did not account for Trump’s tax bill, which is winding its way through Congress. Gopinath added that Bessent had been right to make a “clear call” to bring down fiscal deficits. 
Trump is pressuring Republicans in the House of Representatives, where he has a slim majority, to support the legislation, arguing that doing otherwise would increase voters’ tax bills. Deficit worries and Moody’s downgrade have driven the dollar lower and pushed prices down and yields up in the Treasury market. The 30-year Treasury bond yield on Monday rose to 5.04 per cent, its highest level since 2023. 
 A bigger deficit means the government will have to sell more bonds at a time when foreign and domestic investors have begun to question the stability of the U.S. market.  The IMF in April cut its U.S. growth forecast by nearly a percentage point to 1.8 per cent in 2025, while dropping its global growth projection to 2.8 per cent, as it incorporated the impact of Trump’s tariffs.