Central Banks Tighten as Energy Price Shock Looms

Major central banks are on a tightening path amid concerns about an energy price shock. The Federal Reserve recalibrated its policy to a more restrictive stance on Wednesday, despite traders pricing in a more aggressive response than projected.

The Reserve Bank of Australia has hiked interest rates three times this year to 4.35%, and the door is open for another hike, especially after a hot July inflation print.

Markets are broadly expecting the central bank to hike rates at its meeting later this month. Norway's Norges Bank may be nearing the end of its hiking cycle, with policymakers projecting one more quarter-point hike by year-end.