Moody's Ratings sent Washington D.C. some good news this week in the form of an improved outlook rating to stable from negative.
"Despite the two ongoing transformations in the District's economy – remote work that has weakened the office and retail markets and significant federal job cuts – this rating change demonstrates the critical importance of strong financial management in times of extreme uncertainty," said Glen Lee, chief financial officer for the District of Columbia.
Moody's also affirmed the city's Aa1 issuer rating that includes general obligation bonds, and income tax secured revenue bonds.
"The Aa1 issuer rating reflects the District's overall financial and governance strengths, which offset current local economic weaknesses," said Moody's.
"The District benefits from a highly educated workforce and above average income levels and has exemplary fiscal governance."
Senior lien dedicated tax revenue bonds issued by the Washington Convention & Sports Authority, D.C. are Aa3. Federal highway grant anticipation revenue bonds are rated at A1, according to Moody's.
Ballpark revenue bonds and tax increment revenue bonds are Aa2. Deed tax revenue bonds are Aa3. Multimodal General Obligation Bonds, Series 2026C (Variable-Rate Remarketed Obligations) are Aa1/P-1.
Moody's also cited the city's "lowest pension liabilities of any large city and has pre-funded its other post-employment benefits liability, which provides significant financial flexibility."
S&P Global Ratings and Fitch Ratings both have the city at AA+ with a stable outlook as of January 2026.
Moody's most recent move reverses course on doubts expressed
Moody's also signaled that future upgrades could happen if there is growth in private sector employment to compensate for the loss of 22,356 federal jobs representing $3.656 billion in annualized pay.
The numbers come from the Office of Revenue Analysis which works out of the Office of the CFO.
The biggest loss of jobs happened in September 2025 when over 10,000 federal employees took a fork in the road. Retirement and quitting accounted for the bulk of the loss.
The city's finances are also linked to the federal government by way of Congressional oversight.
Earlier this year, Congress exercised its powers by attempting to prevent the city from following the lead of several states by decoupling its tax policy from some of the provisions included in the One Big Beautiful Bill Act.
The city
The city is also working its way through a billion dollar
Washington is required by law to maintain a balanced budget and submit 5-year budget plans. Its CFO works independently from the mayor's office.
Last November, Bowser that she would not be seeking a fourth consecutive term. Her current term ends in January 2027. She's been the mayor since 2015.
Eleanor Holmes Norton, the city's non-voting delegate in the House of Representatives has announced she will also be stepping down from a position she's held since 1991.
