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 for the first time in its history downgraded U.S. government bonds from the gold star rating of “AAA” to “AA1,” the silver medal equivalent.

Mortgage rates surged after the credit-rating agency Moody’s downgraded U.S. debt.