Further, Chandler said, like the U.S., "the U.K. is hoping oil prices continue to drop" to take pressure off commodity price-fed inflation, although the oil/inflation effect has not been as strong in the U.K., due to Britain's less oil-intensive transportation system. After hitting record highs earlier this summer, oil has fallen about 18% in the past two months to about $121 per barrel.

Meanwhile, the ECB's monetary policy picture is considerably less complicated, Chandler said. The ECB can take a more-aggressive stance on inflation, given the euro-zone's stronger economy. Chandler said he expects ECB President Jean-Claude Trichet's statement latter today to emphasize the need to bring Europe's 3.8% inflation rate closer to the ECB's limit of 2%.

"Clearly, the ECB has more leeway to raise rates and fight inflation, because while growth is slowing, Europe's not likely to fall into a recession," Chandler said. "The U.K. and America don't have that luxury, given their slower growth conditions."

Monetary Policy Analysis: With the above in mind, attach the following biases to each central bank heading into the fall: BOE: neutral, Fed: neutral, ECB: bias toward increasing rates. In the best of all possible worlds, oil prices would moderate to below $90 per barrel - - easing inflation pressure and restoring some GDP growth to the world's major economies. Absent that, the major central banks face their most difficult stagflation problem since, perhaps, the 1970s.