Moody's holds steady on France's credit rating as country grapples with turmoil and higher yields

A protester holds a French flag during a demonstration as part of a nationwide mobilization over rising living costs, fuel prices and education funding in Paris, France, on Oct. 17, 2026.Ibrahim Ezzat | Anadolu | Getty ImagesMoody's opted to maintain its credit rating on France as the country contended with a week of civil unrest and rising political risk.The agency kept France's credit rating at Aa3, a level Moody's still deems "high grade," but it also maintained its negative outlook on the nation."The negative outlook reflects the increased risk that the fragmentation of France's political landscape will continue to impair the functioning of the country's legislative institutions," Moody's said in its report. Moody's noted that it could return France's outlook to stable if its institutions can narrow the deficit. Investors were anticipating Moody's rating decision as France, the second-largest economy in the euro zone, grappled with protests and a sharp surge in bond yields. "This political instability, also visible in the current social tensions, risks hampering the French government's ability to address key policy challenges such as an elevated fiscal deficit, rising debt burd...