diff --git a/DEV.md b/DEV.md
index aaa1b48..077b664 100644
--- a/DEV.md
+++ b/DEV.md
@@ -2,7 +2,7 @@
 
 ## Design
 
-Everything lives in `src/main.rs`. `fastfmt()` pipes a file through `rustfmt --emit stdout` (width and `use_small_heuristics=Max` passed via `--config`, so the project's `disable_all_formatting` guard is overridden), then `compact()` re-joins. `guard_rustfmt()` creates or updates that guard before formatting. Tree-sitter supplies syntax boundaries. `shape` decides how a node may compact: a `Body` joins whole, a `List` packs inside its first and last lines, and a `Run` packs throughout. `compacted` renders one candidate. `compact_round` applies nonoverlapping candidates top-down, repeating until stable. Each accepted edit removes a source newline, so convergence does not need a round limit. After compaction, `format_elses` places `else` branches. README's "Joining rules" section states the rules these functions implement.
+Everything lives in `src/main.rs`. `fastfmt()` pipes a file through `rustfmt --emit stdout` (width, `use_small_heuristics=Max` and `use_field_init_shorthand=true` passed via `--config`, so the project's `disable_all_formatting` guard is overridden), then `compact()` re-joins. `guard_rustfmt()` creates or updates that guard before formatting. Tree-sitter supplies syntax boundaries. `shape` decides how a node may compact: a `Body` joins whole, a `List` packs inside its first and last lines, and a `Run` packs throughout. `compacted` renders one candidate. `compact_round` applies nonoverlapping candidates top-down, repeating until stable. Each accepted edit removes a source newline, so convergence does not need a round limit. After compaction, `format_elses` places `else` branches. README's "Joining rules" section states the rules these functions implement.
 
 The tuning benchmark is AnswerDotAI/loopmini: run stable `cargo fmt` on its `src/`, then `cargo-fastfmt`, and diff against the original. `COMPACT_WIDTH` (120) is the body budget, and also the budget for the call or chain enclosing a joined closure body.
 
diff --git a/README.md b/README.md
index 6c2a513..dcd7dda 100644
--- a/README.md
+++ b/README.md
@@ -24,7 +24,9 @@ Traversal respects `.gitignore`, `.git/info/exclude`, global Git ignores, and `.
 
 `--width N` sets the hard line cap, defaulting to 160. Signatures, imports, lists and expression continuations pack up to that cap. Each joined body must also fit a budget of `min(120, N)` by itself, not counting the signature or condition before it. A closure body joins only when its enclosing call or chain also fits that budget.
 
-On a normal run, fastfmt creates or updates each formatted project's `rustfmt.toml` with `disable_all_formatting = true`, unless that config is ignored. This prevents `cargo fmt` or editor rustfmt runs from undoing the compact formatting. fastfmt overrides the setting for its own pass. No pre-existing config file is needed.
+fastfmt runs rustfmt with `use_small_heuristics = "Max"` and `use_field_init_shorthand = true`, which writes `Foo { x: x }` as `Foo { x }`. These settings override the project's `rustfmt.toml`.
+
+On a normal run, fastfmt adds `disable_all_formatting = true` to the `rustfmt.toml` that rustfmt reads for each formatted package: the nearest one from the package directory up to the repository root. If there is none, fastfmt creates one in the package directory. This prevents `cargo fmt` or editor rustfmt runs from undoing the compact formatting. fastfmt overrides the setting for its own pass. No pre-existing config file is needed.
 
 `--check` never writes the config. It reports a missing or disabled guard as a required update.
 
diff --git a/src/main.rs b/src/main.rs
index 7a3be80..628c555 100644
--- a/src/main.rs
+++ b/src/main.rs
@@ -377,9 +377,10 @@ fn join_comment_lines(src: &str) -> String {
 
 /// Format `src` with rustfmt (stdin mode, sharing our width cap), then compact.
 fn fastfmt(src: &str, edition: &str, width: usize, join_comments: bool) -> Result<String, String> {
-    let mut child = Command::new("rustfmt")
-        .args(["--edition", edition, "--emit", "stdout", "--config", &format!("max_width={width},use_small_heuristics=Max,disable_all_formatting=false")])
-        .stdin(Stdio::piped()).stdout(Stdio::piped()).stderr(Stdio::piped()).spawn().map_err(|e| format!("failed to run rustfmt: {e}"))?;
+    let mut child = Command::new("rustfmt").args([
+        "--edition", edition, "--emit", "stdout", "--config",
+        &format!("max_width={width},use_small_heuristics=Max,use_field_init_shorthand=true,disable_all_formatting=false"),
+    ]).stdin(Stdio::piped()).stdout(Stdio::piped()).stderr(Stdio::piped()).spawn().map_err(|e| format!("failed to run rustfmt: {e}"))?;
     child.stdin.take().unwrap().write_all(src.as_bytes()).map_err(|e| e.to_string())?;
     let out = child.wait_with_output().map_err(|e| e.to_string())?;
     if !out.status.success() { return Err(String::from_utf8_lossy(&out.stderr).into_owned()); }
@@ -458,11 +459,14 @@ fn guarded_config(src: &str) -> String {
     out
 }
 
-/// The guard config for `file`: `rustfmt.toml` in its package directory, or beside it outside a package.
+/// The `rustfmt.toml` that rustfmt reads for `file`'s package, searching up to the repository root, or a new one in the package directory.
 fn config_path(file: &Path) -> PathBuf {
     let dir = file.parent().unwrap();
     let dir = dir.canonicalize().unwrap_or_else(|_| dir.to_path_buf());
-    package_dir(&dir).unwrap_or(&dir).join("rustfmt.toml")
+    let package = package_dir(&dir).unwrap_or(&dir);
+    let repo = package.ancestors().find(|p| p.join(".git").exists()).unwrap_or(package);
+    let mut configs = package.ancestors().take_while(|p| p.starts_with(repo)).map(|p| p.join("rustfmt.toml"));
+    configs.find(|p| p.is_file()).unwrap_or_else(|| package.join("rustfmt.toml"))
 }
 
 /// Ensure ordinary rustfmt is disabled for each target project. Returns paths which needed an update; in check mode they are reported but left untouched.
diff --git a/tests/test_cli.py b/tests/test_cli.py
index 5ea4fed..d971214 100644
--- a/tests/test_cli.py
+++ b/tests/test_cli.py
@@ -86,13 +86,18 @@ def test_workspace_editions(tmp_path):
     subprocess.run(['cargo', 'fastfmt', '--check'], cwd=tmp_path, check=True)
 
 
-def test_standalone_file_in_virtual_workspace(tmp_path):
+def test_virtual_workspace(tmp_path):
+    subprocess.run(['git', 'init', '-q', str(tmp_path)], check=True)
     workspace(tmp_path, ['member'])
+    (tmp_path/'rustfmt.toml').write_text('max_width = 120\n')
     package(tmp_path/'member', 'fn member() {}\n')
     script = tmp_path/'script.rs'
     script.write_text('async fn main() {\n    work().await;\n}\n')
     formats_clean(tmp_path)
     assert script.read_text() == 'async fn main() { work().await; }\n'
+    # rustfmt reads the root config for the member as well.
+    assert (tmp_path/'rustfmt.toml').read_text() == 'max_width = 120\ndisable_all_formatting = true\n'
+    assert not (tmp_path/'member/rustfmt.toml').exists()
 
 
 @pytest.mark.parametrize('ws_setting,pkg_setting,enabled', [