Gabriel Felbermayr warns of a global debt crisis for sovereign states

Gabriel Felbermayr issued a strong warning about a global debt crisis for sovereign states. The main drivers of this concern are rising global yields, which are directly linked to the instability in the Middle East. Investors fear that an ongoing conflict will keep energy prices and inflation at high levels.

Felbermayr expressed concern about the high debt levels of several countries, specifically highlighting the vulnerability of the USA. His criticism is directed at central bank interventions, which are viewed as unsustainable inflationary measures. A central point is the loss of confidence that low interest rates can be maintained through central bank operations, as these measures ultimately always have an inflationary effect. Felbermayr also explicitly criticized the interventions of central banks in the USA and Japan, particularly with regard to the yen and Japanese government bonds (JGBs), thereby warning about the general risks posed by a global increase in debt.