Moody's Investors Service (NYSE: MCO) downgraded Israel's credit rating by two notches on Friday, from "A1" to "Baa1," amid escalating geopolitical tensions with the Lebanese armed group Hezbollah. The credit rating agency also maintained a negative outlook on Israel’s financial standing.
“The key driver for the downgrade is our view that geopolitical risk has intensified significantly, with material negative consequences for Israel's creditworthiness in both the near and longer term,” Moody’s said in a statement.
Higher Uncertainty Over Israel's Economic Prospects
While Israel’s rating remains three notches within investment-grade status, Moody’s highlighted that uncertainties surrounding the nation's security and long-term economic growth prospects are "much higher than is typical at the Baa rating level." A downgrade below this level would lead to a loss of investment-grade status.
“The ratings would likely be downgraded further, potentially by multiple notches, if the current heightened tensions with Hezbollah turn into a full-scale conflict,” the agency warned.
Economic Impact of Downgrade
A loss of investment-grade status would typically lead to higher costs for servicing national debt and could force some investors to sell their holdings, exerting downward pressure on the market price of Israel’s bonds.
The downgrade comes after Fitch Ratings lowered Israel’s credit rating from "A+" to "A" last month, also maintaining a negative outlook.


Vietnam’s Trade Surplus With US Jumps as Exports Surge and China Imports Hit Record
Trump Endorses Japan’s Sanae Takaichi Ahead of Crucial Election Amid Market and China Tensions
U.S. Stock Futures Slide as Tech Rout Deepens on Amazon Capex Shock
South Korea’s Weak Won Struggles as Retail Investors Pour Money Into U.S. Stocks
Dollar Near Two-Week High as Stock Rout, AI Concerns and Global Events Drive Market Volatility
Singapore Budget 2026 Set for Fiscal Prudence as Growth Remains Resilient
Japan Economy Poised for Q4 2025 Growth as Investment and Consumption Hold Firm
South Korea Assures U.S. on Trade Deal Commitments Amid Tariff Concerns
RBI Holds Repo Rate at 5.25% as India’s Growth Outlook Strengthens After U.S. Trade Deal
Dow Hits 50,000 as U.S. Stocks Stage Strong Rebound Amid AI Volatility
Japanese Pharmaceutical Stocks Slide as TrumpRx.gov Launch Sparks Market Concerns
Trump Lifts 25% Tariff on Indian Goods in Strategic U.S.–India Trade and Energy Deal
Silver Prices Plunge in Asian Trade as Dollar Strength Triggers Fresh Precious Metals Sell-Off
Fed Governor Lisa Cook Warns Inflation Risks Remain as Rates Stay Steady
India–U.S. Interim Trade Pact Cuts Auto Tariffs but Leaves Tesla Out
Thailand Inflation Remains Negative for 10th Straight Month in January
Trump’s Inflation Claims Clash With Voters’ Cost-of-Living Reality 



