Money Gets Tighter Almost Everywhere

Why rates are rising. Where they won't. Is the U.S. next?

The first shot was fired on Oct. 1 by the Bank of Canada, which boosted interest rates to cool the country's red-hot economy. Federal Reserve Chairman Alan Greenspan delivered his own October surprise a week later with a terse warning that U.S. growth was "unsustainable," a hint that the Fed was closer to raising rates than was widely assumed. But the big shock came on Oct. 9, when the German Bundesbank approved its first rate increase in five years--a move that prompted similar hikes in France, Belgium, Denmark, and the Netherlands.

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