Investors were settling into the belief that inflation would subside next year with the threat of an economic slump sufficient to do the job of curbing prices. With a sigh of relief, they came to hope that all this would happen in good time to avoid much higher interest rates and a long and deep downturn.They even invented the pivot, the likelihood that the US Federal Reserve and other central banks would early next year be cutting rates to stave off recession.

But Jay Powell, the Fed chair, used his speech at the Jackson Hole central bankers conference to seek to bury that idea.

He spoke briefly, but fiercely. He made clear that the Fed has only one aim, the reduction of inflation. Rates will go higher and stay higher to bring this about. It may well cause some economic damage, but to the Fed that is a necessary price to prevent inflation embedding in the conduct of employers, employees and consumers.