Moody’s Ratings (Moody’s) recently downgraded the United States of America’s (U.S.) long-term credit rating one notch to Aa1 from Aaa and changed the outlook from negative to stable. The downgrade does not impact the Moody’s Aaa-mf rating held by various J.P.Morgan Money Market Mutual Funds (MMFs), or the funds’ ability to purchase and hold U.S. Treasury (UST) securities. MMF ratings are separate and distinct from issuer credit ratings, and generally seek to measure the overall investment quality and risk profile of individual funds, relative to their primary objectives of capital preservation and liquidity.

• On May 16, 2025 Moody’s Ratings (Moody’s) downgraded the United States of America’s (U.S.) long-term credit rating one notch to Aa1 from Aaa and changed the outlook from negative to stable.
• The downgrade does not affect the Moody’s Aaa-mf rating held by various J.P.Morgan Money Market Mutual Funds (MMFs), nor does it impact the funds’ ability to own U.S. Treasury (UST) securities directly or as underlying collateral for repurchase agreements.
• Recall that both S&P Global Ratings (S&P) and Fitch Ratings (Fitch) downgraded the U.S. credit rating from AAA to AA+ in 2011 and 2023, respectively. Both have maintained the rating at AA+ ever since, so the J.P.Morgan MMFs have been operating with at least one double-A rating on the UST for over a decade.
• Moody's attributed its downgrade to “…the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than those of similarly rated sovereigns." Moody’s also noted that “over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat. In turn, persistent, large fiscal deficits will drive the government's debt and interest burden higher.”
• In support of the revised Aa1 rating, Moody’s acknowledged that the U.S. “retains exceptional credit strengths such as the size, resilience and dynamism of its economy and the role of the US dollar as global reserve currency. In addition, while recent months have been characterized by a degree of policy uncertainty, we expect that the US will continue its long history of very effective monetary policy led by an independent Federal Reserve.”
• Acknowledging the challenges raised by Moody’s, J.P.Morgan Global Liquidity believes the United States continues to be the world’s safest sovereign for investment purposes.
• With respect to the Moody’s Aaa-mf rating (which is carried by several J.P.Morgan MMFs and many MMFs across the industry), it is important to note that MMF ratings generally seek to measure the overall investment quality and risk profile of individual funds, relative to the funds’ primary objectives of capital preservation and liquidity. MMF ratings are separate and distinct from issuer credit ratings, which generally evaluate the creditworthiness of debt-issuing entities, focusing on the likelihood of default and potential financial loss. The rating agencies denote this distinction with a modified ratings scale: an “-mf” suffix for Moody’s (Aaa-mf), an “m” suffix for S&P (AAAm), and an “mmf” suffix for Fitch (AAAmmf). Each rating agency defines the specific criteria for achieving a triple-A MMF rating, which is partly driven by the underlying credit quality of the fund’s investments, but also by the fund’s liquidity profile, diversification of the fund’s holdings, the fund’s sensitivity to market fluctuations, and the quality of the fund’s management team. Importantly, triple-A MMF ratings are not purely a function of the average credit quality of a fund’s underlying holdings—therefore, a UST downgrade to double-A or even single-A credit rating levels would not jeopardize a MMF’s triple-A ratings in isolation.

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