Price pressures remain elevated but economic momentum slowed as Q2 wound down. Many market participants think this poses a dilemma for policymakers and are skeptical that the hikes signaled will be delivered because of economic weakness or financial strains. These developments are thought to limit the tightening cycle before the inflation genie can be stuffed back into the bottle. Yet, this may underestimate the resolve of most of the major central banks in tackling inflation. Many seem willing to risk a shallow downturn if necessary to bring price pressures. Only if there are signs of a significant downturn or ... (full story)