The world’s central banks have unleashed the steepest series of interest-rate increases in decades during their two-year drive to tame inflation—and they may not be done yet. Policymakers have raised rates by about 400 basis points on average in advanced economies since late 2021, and around 650 basis points in emerging market economies.

Most economies are absorbing this aggressive policy tightening, showing resilience  over the past year, but core inflation remains elevated in several of them, especially the United States and parts of Europe. Major central banks therefore may need to keep interest rates higher for longer.