Can the USA Default on Its Debt?

Economist Lars Feld has warned of potential risks surrounding United States sovereign debt, cautioning that fiscal trajectories could spark a new financial crisis under specific pressure points, according to an interview published by WirtschaftsWoche on August 29, 2026.

Feld addressed the viability of American debt servicing obligations in the economic commentary. When asked whether a scenario could emerge where the United States is no longer able to service its financial liabilities, Feld indicated he would not go that far, while still highlighting underlying structural vulnerabilities in global debt markets.

The evaluation arrives amid ongoing discussions among international economists regarding rising borrowing costs and expanding budget deficits in major industrial economies. Financial observers continue to monitor how fiscal policy shifts in Washington might impact international capital markets and exchange rates.

Market participants and economic analysts frequently evaluate sovereign risk metrics to gauge long-term portfolio exposure. While standard institutional assessments view outright default as an extreme tail risk, rising debt-to-GDP ratios draw continuous scrutiny from policy researchers tracking macroeconomic stability.