Inflation debate hangs over record run on the stock market

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Some traders are sticking to their bets on persistently high inflation after Wednesday’s Federal Reserve meeting, underscoring the divergent expectations between segments of the bond market and the Federal Reserve.

The S&P 500 climbed to new records on Wednesday and Thursday after Fed Chairman Jerome Powell’s press conference reassured investors that the central bank would not be overly aggressive on rate hikes, even though it had plans to end bond purchases by June. Powell said the central bank believes inflation will slow down through the second or third quarter of next year as companies ramp up production of goods and supply chain confusion eases.

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