Central banks walk inflation-recession tightrope

Central banks have ramped up their battle against runaway inflation, a necessary remedy that could have the adverse side effect of tipping countries into recession, analysts say.

Just this past week, the US Federal Reserve announced its biggest interest rate hike in almost 30 years, followed by the fifth straight increase by the Bank of England and the first in 15 years in Switzerland.

"This week was a first. The craziest in my experience," said Frederick Ducrozet, chief economist at Pictet Wealth Management.

The moves rattled stock markets as investors fear that while the rate increases are needed, they could put the brakes on economic growth if the tightening of monetary policy becomes too aggressive.

"Recessions are increasingly likely as central banks race to dramatically raise rates before inflation spirals out of control," said Craig Erlam, an analyst at online trading platform OANDA.