IMF, Report: Central Banks Can Fend Off Financial Turmoil and Still Fight Inflation

“In practice, the boundaries between the different scenarios are fuzzy. Uncertainty about the health of the financial system and its resilience to monetary tightening will inevitably complicate central banks’ decision processes. However, through the lens of our proposed taxonomy, the recent events in Switzerland, the United Kingdom and the United States suggest that the forceful responses by authorities to heightened financial stress helped reduce financial instability and allowed central banks to maintain their inflation fighting stance.”