Moody's downgraded Israel's credit rating from A2 to Baa1, citing intensified geopolitical risk and painting a bleak picture of the country's economic and political future. The agency highlighted several factors contributing to the downgrade, including the impact of the Israel-Hamas War on the economy, delays in implementing the haredi draft, and the government's failure to lay out an exit strategy from the conflict. Moody's also expressed concerns about the weak growth outlook, higher deficit, and delayed preparation of the 2025 budget. The agency left Israel's outlook at negative, indicating the possibility of further ratings drops in the future.