On Friday, Moody’s downgraded the U.S. long-term issuer and senior unsecured ratings to Aa1 from Aaa.

U.S. Treasury Scott Bessent shrugged off Moody’s downgrade of the country’s credit rating and also offered an update on the tariff talks.

He told CNN on Sunday that the downgrade is a lagging action, saying, “The history of rating agencies [is that] by the time they get to a downgrade, everything’s already in the market.” 

Bessent instead deflected the conversation to Trump’s accomplishments during his recent Middle East tour. He said, “President Trump has just come back from this historic Mideast trip, and there’s trillions of dollars coming into the U.S.”

“So we are seeing competence from investors, so I don’t put much credence in the Moody’s [rating].”

On Friday, Moody’s downgraded the U.S. long-term issuer and senior unsecured ratings to Aa1 from Aaa and changed the outlook to “stable” from “negative.”

The agency blamed the ratings downgrade on the large fiscal deficits racked up by successive administrations and the growing interest costs. “The U.S.’ fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns,” it added.

Moody’s is the last of the three major rating agencies that rates the U.S. below the “AAA” position — the top rating.

Bessent said he inherited a 6.7% deficit to GDP, the highest deficit when the country was not at war or in a recession. He added, “So we have been trying to bring down the spending, and we are going to grow the revenue side."

“And so we are going to grow the GDP faster than the debt grows, and that will stabilize the debt-to-GDP.”

The Treasury Secretary expressed similar sentiments in an interview with CNBC. When asked about Qatar offering Trump a plane, Bessent said, "It's not the president but the United States government."

He called the president's trip "incredible," as he brought "trillions of investments" into the U.S. 

"Every stuff we made, the enthusiasm in Saudi Arabia, in Qatar, in the United Arab Emirates, to invest in the United States. They want to push more and more funds here."

Referring to Moody's downgrade, Bessent said, "Who cares? Qatar doesn't, Saudi doesn't, UAE doesn't." 

"They are all pushing money in. They all made a 10-year investment plan," Bessent added.

Delving into the tariffs, Bessent said in the CNN interview that President Trump has notified the major trading partners. “If you do not negotiate in good faith, that you will ratchet back up to your April 2 level,” he said.

He also said that with a few exceptions, the “countries are coming with very good proposals for us.”

Bessent clarified the administration’s stance on China. “We don’t want to decouple with China. And President Trump actually wants to open up China for business. So the manufacturing, we want to bring back.”

After bumping up China tariffs to 145%, the U.S. and China negotiated a deal last week to suspend much of the levies for 90 days. 

Bessent said, “We had — during COVID, we realized that we had some very strategic shortfalls, whether it was medicines, semiconductors, steel, the other products.”

“So the long-term -- the medium-term goal is to bring back these strategic industries as quickly as possible.”

The Invesco QQQ Trust (QQQ) ETF, an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index, is up 2.2% for the year, while the  broader SPDR S&P 500 ETF (SPY) has gained 1.7%.

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