It’s still “inflation or bust” as far as the Fed is concerned

The latest interest-rate meeting of the US Federal Reserve has confirmed what markets already knew – central banks are pursuing "inflation or bust” policies. John Stepek explains what that means for you. 

Jerome Powell’s message is clear: the Fed wants inflation to be a good bit higher than its 2% target
(Image credit: 2020 Getty Images)

Meetings of the US central bank – the Federal Reserve – are usually really important to markets. The Fed, after all, is in charge of the US dollar, which is the world’s most important currency. Its policies affect the US economy, which is the world’s most important economy. Its decisions on interest rates affect the spending power of the US consumer, arguably the world’s most important source of demand.

So did anything worthwhile come out of last night’s meeting, the first of 2020? At first glance, it seems not. But it’s worth taking a second look.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.