The central banks' goal is to curb the soaring inflation that in all major economies turned out to be faster and broader than expected. A year ago, central banks thought they could tighten monetary policy gradually as inflation seemed to be a temporary phenomenon, but this outlook changed rapidly.
Although central banks have increased interest rates exceptionally quickly, the current level of rates is not, however, especially high by historical standards. Yet, even a moderate rise in interest rates matter as, in many countries, household debit accumulation grew considerably during the times of low interest rates.