Moody's Credit Outlook: 15 September 2025

Here are the top highlights from this week's edition of Moody's Credit Outlook:

First Reads

French Prime Minister François Bayrou’s ousting in a confidence vote over its fiscal deficit-reduction plan has underscored the institutional challenges France faces in addressing its primary credit challenge. With a fractured parliament and no clear majority, whether the government can secure support for a 2026 budget remains uncertain. Although Sébastien Lecornu was swiftly appointed to succeed Bayrou, the accompanying political upheaval has reignited fiscal uncertainty, posing risks to French banks.

Featured News and Analysis

Oracle’s $300 billion in contracts highlights extraordinary potential of AI business

Oracle's AI contracts reflect tremendous potential for its AI Infrastructure business, but we expect extremely high related costs and overall growth in balance sheet obligations, which could result in an extended period of high leverage and negative cash flow.

Stronger cybersecurity requirements reinforce Brazil's financial system stability 

More stringent regulations for payment institutions will strengthen cybersecurity in Brazil’s financial system, a credit positive for local banks. The measures contrast with a decade-long trend of regulatory relaxation by the central bank.

Revisions reveal softer US labor market than previously perceived

Revised data show 911,000 fewer jobs than previously estimated were added through March 2025, suggesting the job market entered 2025 with less momentum than previously thought. We expect unemployment to rise only gradually through mid-2026, however, helped by low layoff rates and supportive fiscal and monetary policies.

Credit in Depth

Geopolitical conflicts have highlighted the need for alternative trade routes such as the Middle Corridor. Rapid growth in transit volumes and investment benefits Kazakhstan, Azerbaijan and Georgia. For global property and casualty insurers, profitability has improved with underwriting actions despite natural catastrophe volatility, inflation and rising costs.