The collective warning from Davos is that the all-powerful central banks are no longer on your side, so don’t tempt fate by reflex buying the dips.

Money gendarmes have let the inflation genie out of the bottle and will have to squeeze markets until the pips cringe in order to keep it from unleashing now in major Western economies.

“The ‘Fed Put’ is over. They don’t care what happens to the markets,” said Jason Furman, former chairman of the White House Council of Economic Advisers.

He warned that rates will have to go much higher than the Federal Reserve has so far admitted, or markets expect.

“They haven’t done enough yet to prepare people,” he said, speaking at the World Economic Forum.

There are growing fears that the Fed will finally be forced to dispense the drug ‘Volcker’ of the late 1970s. It has already begun to engineer a deliberate and (hopefully) controlled collapse in stock and asset prices .

“I don’t think the Fed believes its own inflation forecasts or models anymore, they’ve been so badly burned,” Furman said.

The prevailing view in elite political circles is that if the Fed doesn’t start the boil now, the punishment will be even more painful and destructive later.

“It reminds me of Argentina,” said Harvard professor Ricardo Hausmann, a veteran of Latin American crises, describing the Fed’s endless series of apologies last year, even as the economy was awash in money and inflation was clearly rising.

“There are simply too many stimuli in the pipeline and they are going to have to act with a lot more force. I lose sleep thinking the Fed is way behind the curve,” he said.

Furman said inflation was primarily driven by excess demand and liquidity in the economy, rather than supply chain disruptions or higher energy prices, like the Fed l ardently supported until the end of last year. The institution misjudged the calibration of the stimulus measures.

It predicted inflation this year of 2.2% as recently as December, but the figure is already at a 40-year high of 8.5%. Fed staff relied on a new Keynesian Phillips curve model that omits most of the key ingredients of price shocks and is “unable to predict any inflation,” Furman said.