Central banks have yet to script final act of inflation fight as risks rise

Major central banks may be deep into their drive to raise interest rates in hopes of killing inflation, but the endgame remains far from clear as price increases prove harder to slow than expected, and analysts caution that financial markets could still break along the way.

The U.S. Federal Reserve, the European Central Bank and the Bank of England are all still raising rates, and policymakers are open about the massive uncertainty surrounding their projections and the risk they may have to do more than expected.

But all are also felt to be closing in on a peak interest rate for this round of monetary policy tightening while holding fast to projections that inflation will slow steadily over the next year or two without a major blow to economic activity.

That view has received a skeptical response from top global policymakers and analysts who see a world where persistent shortages of labor, cleavages in global supply, and wobbly financial markets may force a choice between higher and longer-lasting inflation, or a deep recession to fix it.

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