Central banks say interest rates will stay high but it's unclear if this will be enough to curb inflation

Central bankers, policymakers and academics meet annually at Jackson Hole, Wyoming to discuss the economy. Sarah Hollemans/Shutterstock

The US central bank, the Federal Reserve, has recently signalled that it will keep interest rates high for as long as it takes to bring inflation down to its 2% target.

Other major central banks, such as the UK’s Bank of England and the European Central Bank (ECB), are likely to follow suit. But rate-setters face some dilemmas when it comes to balancing the use of interest rates to slow the economy versus the risk of a recession.