Credit Rating Agencies (CRAs) sovereign rating decisions are based on assessments of sovereign risk—a government’s default probability. Many studies explain rating decisions without considering the context in which those rating decisions are made: namely global risk appetite and liquidity. We theorize that rating decisions are conditional on global risk appetite, set by US interest rates. When US interest rates are high and global risk appetite is low, rating agencies are more likely to adjust ratings based on a government’s political and economic characteristics and policies. In contrast, when US interest rates are low and global risk appetite is high, those same sovereign characteristics and policies do not lead to ratings adjustments because CRAs do not perceive them as central to risk as they do under tighter global financial conditions. To test our theory we use multiple methods, including (1) models of ratings outcomes, (2) models of ratings outlooks and (3) Latent Semantic Scaling in a Quantitative Text Analysis of Moody’s credit rating decision reports from 1988-2024. We identify how both sentiment about similar policies and ultimate changes or non-changes in ratings in response to policies and sovereign features depend on global risk appetite and liquidity. CRA sovereign assessments are not static, but vary according to global economic factors. This implies that CRA discipline of borrower politics is not constant, but varies with global interest rates, increasing pro-cyclicality in global financial markets.