Worldwide inflationary worries aren’t likely to evapourate any time soon, says HSBC Bank plc economist Stephen King, in a research note.

King says that the global economy has been strong despite weakness in the United States, but largely because of the influence of U.S. monetary policy. “Many emerging markets still tie their monetary policies to those of the U.S. yet, unlike the U.S., emerging economies are mostly booming,” King says. “Even if U.S. monetary conditions are about right, global monetary conditions now appear to be too loose.”

“Inflationary pressures are now a bigger threat, whether through asset price gains, excessive increases in money supply or renewed upward pressure on commodity prices. And the story is not limited to emerging markets: increasingly, the eurozone and the UK are experiencing the spill-over effects stemming from overly-loose monetary conditions elsewhere in the world,” King adds.

While the U.S. Federal Reserve Board is likely on hold for the rest of the year, HSBC says that won’t stop the European Central Bank, Bank of England, Bank of Canada, and others from pushing interest rates still higher. “Central banks in these countries have discovered that control of monetary policy through the setting of interest rates no longer guarantees control of monetary conditions. The attempt to regain control simply means more in the way of interest rate increases to come,” King concludes.