Fed's actions spoke louder than words to markets in fight against inflation, research finds

The credibility of the Federal Reserve helped financial markets in the central bank's multiyear battle against inflation, but it had to back up its verbal promises to restore price stability with rate cuts, according to new research presented at the Kansas City Fed's annual research conference in Jackson Hole, Wyoming.

The research found that a strong perception in financial markets that a central bank is committed to controlling inflation can make its monetary policy more effective, prompting...