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Bill Dudley

Wishful Thinking Won’t Help the Fed Beat Inflation

Market speculation about a “pivot” is overdone and counterproductive.

There’s a time and place to pivot.

There’s a time and place to pivot.

Photo: Hulton Archive/Getty Images

Investors have lately become strangely optimistic that the Federal Reserve won’t have to tighten monetary policy much further, bidding up stocks and bonds amid hopes that the Federal Reserve will soon get inflation under control.

This wishful thinking is both unfounded and counterproductive.