- Pakistan 122-1 at lunch in first England Test
- Kazakhs approve plan for first nuclear power plant
- World marks anniversary of Oct. 7 attack on Israel
- 'Second family': tennis stars hunt winning formula with new coaches
- Philippines, South Korea agree to deepen maritime cooperation
- Mexico mayor murdered days after taking office
- Sardinia's sheep farmers battle bluetongue as climate warms
- Japan govt admits doctoring 'untidy' cabinet photo
- Israel marks first anniversary of Hamas's October 7 attack
- Darvish tames Ohtani as Padres thrash Dodgers
- Asian markets track Wall St rally on jobs data
- Family affair as LeBron, Bronny James make Lakers bow
- Cancer, cardiovascular drugs tipped for Nobel as prize week opens
- As Great Salt Lake dries, Utah Republicans pardon Trump climate skepticism
- Amazon activist warns of 'critical situation' ahead of UN forum
- Mourners pay tribute to latest victims of deadly Channel crossing
- Phillies win thriller to level Mets series
- Yu bags first PGA Tour win with playoff win
- PSG held by Nice to leave Monaco clear at top of Ligue 1
- Lewandowski treble for leaders Barca as Atletico held
- Fresh Israeli strikes hit south Beirut
- Sucic stunner earns Real Sociedad draw against Atletico
- PSG draw with Nice, fail to reclaim top spot in Ligue 1
- Gudmundsson downs AC Milan after De Gea's penalty heroics for Fiorentina
- 'Yes' vote prevails in Kazakhstan nuclear plant vote: TV
- 'Difficult day': Oct 7 commemorations begin with festival memorial
- Commemorations begin for anniversary of attack on Israel
- 'Nothing gets in way of team,' says Celtics' MVP hopeful Tatum
- 'We will win!': Mozambique's ruling party confident at final vote rally
- Tunisia voting ends as Saied eyes re-election with critics behind bars
- Florida braces for Milton, FEMA head slams 'dangerous' Helene misinformation
- Postecoglou slams 'unacceptable' Spurs after 'terrible' loss at Brighton
- Marmoush double denies Bayern outright Bundesliga top spot
- Rallies worldwide call for Gaza, Lebanon ceasefire
- New 'Joker' film, a dark musical, tops N.America box office
- Man Utd stalemate keeps Ten Hag in danger, Spurs rocked by Brighton
- Drowned by hurricane, remote N.Carolina towns now struggle for water
- Vikings hold off Jets in London to stay unbeaten
- Ahead of attack anniversary, Netanyahu says: 'We will win'
- West Indies cruise to T20 World Cup win over Scotland
- Man Utd fire another blank in Aston Villa stalemate
- Lewandowski treble powers Liga leaders Barca to Alaves victory
- Russian activist killed on front line in Ukraine
- Openda strike briefly sends Leipzig top of Bundesliga
- Goal-shy Man Utd have to 'step up', says Ten Hag
- India bowl out Bangladesh for 127 in T20 opener
- Madueke rescues Chelsea in draw with 10-man Forest
- Beckett's belief rewarded as Bluestocking storms to Arc glory
- Trump on the stump, Harris hits airwaves in razor-edge US election
- Flash flooding kills three in northern Thailand
Central banks walk inflation-recession tightrope
Central banks have ramped up their battle against runaway inflation, a necessary remedy that could have the adverse side effect of tipping countries into recession, analysts say.
Just this past week, the US Federal Reserve announced its biggest interest rate hike in almost 30 years, followed by the fifth straight increase by the Bank of England and the first in 15 years in Switzerland.
"This week was a first. The craziest in my experience," said Frederick Ducrozet, chief economist at Pictet Wealth Management.
The moves rattled stock markets as investors fear that while the rate increases are needed, they could put the brakes on economic growth if the tightening of monetary policy becomes too aggressive.
"Recessions are increasingly likely as central banks race to dramatically raise rates before inflation spirals out of control," said Craig Erlam, an analyst at online trading platform OANDA.
Capital Economics, a research group, said it does not anticipate a recession in the United States.
"But the Fed is deliberately tempering demand in order to reduce price pressures. This is a difficult line to tread and there is clearly a risk that it goes too far and the economy tips into recession," it said in a note.
Emerging countries could be collateral victims from rate hikes. The dollar rises when the US Fed raises its rates.
"A strong dollar will complicate (debt repayments) of countries with deficits, which borrow often in that currency," Ducrozet said.
- Swiss surprise -
Central banks had insisted last year that inflation was only "transitory" as prices were driven up by bottlenecks in supply chains after governments emerged from lockdowns.
But energy and food prices have soared in the wake of Russia's invasion of Ukraine, pushing inflation higher and prompting economists to lower the world's growth prospects for this year.
This has left central banks with no other choice but to move more aggressively than planned.
Australia's central bank raised rates more than expected earlier this month while Brazil last week lifted its benchmark rate for the 11th straight time. More hikes are looming in the United States and Europe.
But it is the Swiss National Bank that caused the biggest shock on Thursday when it announced a rate increase of 0.5 percentage points, the first since 2007.
The SNB had focused on keeping the Swiss franc from being too strong until now.
"The actions of the SNB are notable in that they mark a significant shift in policy (away) from a very dovish position," said Michael Hewson, chief market analyst at CMC Markets UK.
The European Central Bank has been slower to act than its peers. It is putting an end to its massive bond-buying scheme and will finally raise rates next month for the first time in a decade.
The eurozone faces another problem: The yields paid by its governments to borrow money have surged, with indebted countries such as Italy being charged a premium compared to Germany, a safer bet for investors.
This "spread" revived memories of the eurozone's debt crisis, prompting the ECB to hold an emergency meeting on Thursday after which it said it would design a tool to prevent further stress in the bond market.
The Bank of Japan bucked the global trend on Friday as it stood by its decision not to raise its rate, sending the yen close to the lowest level against the dollar since 1998.
But even the Bank of Japan could adjust its policy, said Stephen Innes, managing partner at SPI Asset Management.
"BoJ members are considering public dissatisfaction with inflation and the rapid depreciation of the yen," Innes said.
"While they plan to maintain the current easing policy, they may look to make some tweaks to support the currency," he said.
- No immediate fix -
Consumers will have to be patient before they see the rate hikes have an effect on prices.
ECB chief Christine Lagarde said it bluntly when announcing plans for a rate increase next month: "Do we expect that July interest rate hikes will have an immediate effect on inflation? The answer to that is no."
Central banks do not have control over some of the problems that are lifting inflation, such as soaring energy and food prices, and the supply chain snarls.
Capital Economics said energy and food prices accounted for 4.1 percentage points of the 7.9 percent rise in consumer prices in major advanced economies over the past year.
It expects oil, gas, and agricultural commodity prices to start falling later this year, which would bring inflation down sharply, but core inflation rates will remain elevated.
F.Carias--PC