An unstated assumption in my post is that productivity growth does not continue apace. When interest rates are low, companies are incentivized to invest in lower marginal productivity investments, because those investments still remain profitable when cost of capital is low. When rates suddenly go up, a number of these investments become unprofitable: the income streams from them don't exceed the new higher interest rates companies would have to pay to roll their bonds. Therefore the central bank is stuck unable to raise rates.

Note that there is another potential ending for this: a deflationary trap like Japan is in, or like the U.S. was in from 2009-2020.

I'm betting on hyperinflation, though. The reason is that nearly all past hyperinflationary events have come from large sector shifts in aggregate demand and aggregate supply, notably when coming down from a war or transitioning from a command economy to a market economy. COVID just provided exactly such a supply/demand shock: large quantities of production were shifted into medical devices and remote work, while demand shifted away from travel, experiences, and gasoline to home improvement & home office supplies. When demand shifts back, those industries will have significantly reduced capacity, and a lot of bargaining power to raise prices. The raised prices cascade through the economy, and that's what triggers inflation.

It's like the economy is your heater, money-printing is turning up the gas because it's not getting hot enough, low productivity is not realizing that your igniter is broken, and COVID is lighting a match. Without COVID you'd just open your windows and air out the gas (although it still wouldn't fix your broken igniter). With it, we go boom.