The debt market is in a "dangerous situation" as central banks around the world lose their ability to stimulate growth, hedge fund giant Ray Dalio said Tuesday.

As the world faces more than $11 trillion in negative-yielding debt, Dalio said central banks like the Fed, the European Central Bank and the Bank of Japan are facing a dilemma.

"There's only so much you can squeeze out of the debt cycle, and we're there globally," the head of Bridgewater Associates said at the Delivering Alpha conference presented by CNBC and Institutional Investor. "You can't lower interest rates more."



