Israel's credit rating has been downgraded by Moody's due to major distrust in the government's ability to bring about a responsible budget and reduce the deficit. The downgrade reflects the government's lack of understanding of the current economic situation and the gravity of the moment. The Israel-Hamas war has led to increased government spending and a swollen deficit, and the lower credit rating will further raise interest costs. The rating decision was also influenced by the government's lack of an exit strategy from military conflict and the risks undermining the country's relations with key allies.