The combination of falling inflation and rising asset prices in the United States and elsewhere is creating a conundrum for central bankers, says Wall Street Journal columnist Alen Mattich.

U.S. consumer prices were unchanged in the 12 months through February, and the S&P 500 index stands less than 2 percent from its record highs.

"The balancing act required to manage the tricky scenario of falling inflation and rocketing asset prices has many a policymaker sounding nervous, and with good cause," Mattich writes.

For example, St. Louis Federal Reserve President James Bullard told the Financial Times Monday that the Fed risks igniting asset bubbles with "devastating consequences" if it doesn't raise interest rates soon.

But for the most part, it's "clear that central bankers will mostly play down bubble risks (they’ve seldom identified bubbles except with hindsight and not always then either) and keep their focus on the main real economy metrics: inflation and unemployment," Mattich says.

"Whether the outcome will be better than it was the last time round is another matter."

Many economists expect the Fed to begin increasing rates in September.

As the Fed and Bank of England prepare to boost interest rates, risks are rising in the financial system, says Ben Wright, group business editor at The (London) Telegraph.

"An unprecedented monetary experiment is coming to a staggered end, and no one knows the potential repercussions — a plague of frogs cannot be entirely ruled out," he writes.

While the Fed and BOE are on the path toward tightening, the European Central Bank and the Bank of Japan have intensified their easing campaigns.

"For the time being, the markets remain sanguine, and, who knows, maybe the markets are right. But maybe it’s too quiet," Wright says.

"The policy response to the last crisis often sows the seeds for the next. It is not hard to map out a sequence of events in which that proves to be the case again. If it were, a U.S. stock market crash might be the least of our problems."

Related Stories:

• Stifel's Bannister: Stocks to Gain 12 Percent on Cautious Fed
• SocGen's Edwards: Fed Rate Hike Will Be Too Late to Avert Disaster