At the annual gathering of central bankers at Jackson Hole on Aug 26, the chairman of the US Federal Reserve Jerome Powell delivered an eight-minute short, sharp and grim message: the Fed will keep tightening monetary policy till it is satisfied that inflation is headed back towards its 2 per cent target.

He quashed speculation among financial market players that it would soon "pivot" to a more moderate stance, which had fuelled a rally in stock and bond markets through most of last month. He made no reference to the "softish" landing for the economy that he had mentioned in May, or the risks of over-tightening that the Fed's rate setting committee had flagged in the minutes of its meeting in July. Instead, he warned that higher interest rates would bring "some pain" to households and businesses.