Interest rates at record levels and the fear of a new debt crisis: economist Torsten Polleit in an interview

Interest rates at record levels and the fear of a new debt crisis: economist Torsten Polleit in an interview

Interest rates at record levels are also causing fears of a new debt crisis to flare up again. Economist Torsten Polleit speaks on wO-TV about the reasons and consequences of the dilemma.

Shortly

Interest rates at record levels are triggering fears of a new debt crisis. Major buyers such as China and Japan are withdrawing as buyers of US government debt. Rising yields on bonds are pushing back private investment.

The impact of current record interest rates on the market is worrying. In particular, the major buyers of US government debt such as China, Japan, Russia and Brazil are withdrawing as buyers of new bonds. This creates a difficult situation in which the US Treasury is struggling to find buyers for long-term government bonds. As a result, issuing banks had to take on a significant portion of the outstanding bonds themselves. This shows that rising interest rates and yields on bonds are affecting lending and private investment as companies and individuals look for cheap financing options.

It is therefore very likely that key interest rates will be cut sooner than many expect. Pressure is increasing on central banks to cut interest rates as elevated interest rates become a problem for economies and lead to a drastic slowdown in bank lending. This development has negative effects on growth and employment.

According to a report by www.wallstreet-online.de