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Fed’s Inflation Fight Gets a Boost Amid the Wall Street Rout

  • Inflation expectations fall as financial conditions tighten
  • Market is showing ‘some faith’ in Fed’s credibility: BMO
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Fed Doing 'Bare Minimum' With Three 50Bps Hikes: BofA's Harris

Beneath the latest global market disruptions are clues that the Federal Reserve is making slow but sure progress in its bid to curb the excesses of this inflation-addled business cycle. 

Ever-tightening financial conditions and the draining of stock-market froth suggest Wall Street is taking the Fed’s hawkish stance seriously, a development that should eventually help cool the expansion. Meanwhile falling market-derived inflation expectations constitute a rare win for monetary officials on a mission to convince Americans that price pressures will ease soon enough.