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Inflation is likely to ease up, but housing prices remain a cause of concern, the World Bank said, adding that interest rates need to go higher.
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As an example with a low interest rate environment adding long bonds may not be appropriate when interest rates go up.
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Some commenters suggested that home prices would fall after mortgage interest rates rose, adding further difficulties to those who might otherwise want to sell their homes and move.
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As interest rates on Treasury securities heads higher, so do the rates on mortgages and credit cards, adding further downward pressure on American living standards and suppressing economic growth.
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But since interest rates cannot be sustained at current levels without adding unbearably to the budget through extra debt-servicing costs, the only hope of restoring market confidence after the election will be a far more drastic fiscal squeeze.
ECONOMIST: Brazil
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Adding insult to injury is the fact that Brazil currently has its lowest interest rates in more than 50 years.
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Consumer confidence remains in the doldrums even after the central bank this month lowered interest rates to a record low 2.75%, adding to a string of rate-cuts since late 2011 designed to spur activity in weaker parts of the economy such as retail sales and housing.
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Adding insult to injury the ECB has signaled that it will raise short-term interest rates by about as much in an effort to contain inflation.
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Interest rates are typically higher for investment properties should you need to refinance down the road, adding another potential headache.
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