"We are experiencing a series of major political shocks; we saw another example of that yesterday," Dr Lowe said on Saturday, a day after China and the United States slapped more tariffs on each other's goods and President Donald Trump called on American companies to shut down their operations in the Asian nation.

As those political shocks slow growth, Dr Lowe said in a panel discussion at a meeting of central banks in Jackson Hole, Wyoming, "there is a strongly-held view that the central bank should just fix the problem.... The reality is much more complicated," and not something monetary policy can likely repair.

His comments spoke to an uncomfortable truth.

Even as central bankers and economists referred to the deep connections that now tie the world's economies together, a US-driven trade war seemed to be driving them apart and raising the spectre of a broad global downturn.

Worse, it's a downturn none of the central bankers seemed confident about how to fight - coming not from a business- or financial-cycle meltdown that they have a playbook to combat but from political choices that threaten to crater business confidence.

If that's the problem, Dr Lowe and others said, lower interest rates - something demanded by Trump to get an upper hand in the trade war with China - will do little to help.

"Monetary policy cannot deliver medium-term growth," Dr Lowe said, according to reports by Bloomberg. "We risk just pushing up asset prices.

"With these levers (of infrastructure spending and structural reform) stuck, the challenge we face is that monetary policy is carrying too much of a burden."

It is a view echoed by other central bankers.

"The problem is in the president of the United States," former Fed vice chair Stanley Fischer said at a lunch event on Friday. "How the system is going to get around some of the sorts of things that have been done lately, including trying to destroy the global trading system, is very unclear. I have no idea how to deal with this."

Central banks have asked politicians for years to use fiscal policy more constructively and address structural problems plaguing economies.

What they've gotten instead is a fast multiplying set of risks, with the US-China trade war at the epicentre but also including the possibility of a disruptive British exit from the European Union, an economic slowdown in Germany, a political collapse in Italy, rising political tensions in Hong Kong, and longstanding international institutions and agreements under pressure.

"There is not that much policy space and there are material risks at the moment that we all are trying to manage," Bank of England governor Mark Carney said.

Australian Associated Press