The Perils of Raising Rates

Global investors are more exposed to interest-rate hikes than ever.

Watch those rates.

Photographer: Carl Court/Getty Images

With any luck, the world economy will eventually be strong enough for central banks to follow the U.S. Federal Reserve in ending what has been an unprecedented period of extremely low interest rates. If and when they do, they'll run straight into the same issue that the Fed now faces: Raising rates will precipitate unusually large losses for investors.

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