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Higher interest rates set to balloon nations' pandemic debt burden

Central banks face policy dilemma from inflation and high borrowing costs

Federal Reserve Chairman Jerome Powell is seen delivering remarks on screens as traders work on the trading floor at the New York Stock Exchange. The Fed is expected to raise rates as early as March, with some predicting as many as seven hikes this year.   © Reuters

TOKYO -- Interest rates are trending higher worldwide as central banks pivot toward monetary tightening, threatening to raise debt-serving costs for countries that spent aggressively to cushion the pandemic's blow to their economies.

In the U.S., the 10-year Treasury yield topped 2% this week for the first time since 2019, jumping from less than 1.5% in December.

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