Central Banks Steer Cautious Hiking Path Amid Uncertainty

The US Federal Reserve kept its interest rates unchanged at its recent meeting, despite Chief Kevin Warsh's pledge to bring inflation down. This move came as a surprise to traders and triggered heavy selling in longer-dated bonds.

In contrast, the Reserve Bank of Australia has raised interest rates three times this year to 4.35 per cent, making it the highest among G10 countries. The RBA's chief says policy makers are prepared to raise rates again, despite inflation data undershooting forecasts.

The Norges Bank is already in hiking mode after a surprise move in May to curb inflationary pressures fuelled by the Iran war. It has left its rates unchanged at 4.25 per cent last month.