Crunch time after string of aggressive central bank rate hik

Major central banks have confounded economists with a string of interest rate rises that, so far, have moderated inflation without causing global recession. Now comes the challenge: how to pause monetary tightening without unleashing market exuberance about future rate cuts that would loosen financial conditions and revive price pressures. The European Central Bank on Thursday raised rates by 25 basis points (bps), while the U.S. Federal Reserve next week is expected to keep borrowing costs steady, while trying hard to rein in speculation about future easing.

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