An enormous U.S. government deficit continues to raise concerns about fiscal sustainability as Moody’s joined other rating agencies in downgrading the U.S.’s credit rating.

This raises questions about the implications for U.S. monetary policy, interest rates, and the impact on neighboring economies.

In this episode of the 10-Minute Take, RBC Economics’ Claire Fan and Carrie Freestone explore:

• Why fiscal challenges may be limiting the U.S. Federal Reserve’s ability to cut interest rates.

• How the recent "Big Beautiful Bill" could add to the fiscal burden.

• What these trends mean for Canada’s economy and monetary policy.