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Photo illustration: Eniola Odetunde/Axios. Photo: Zach Gibson/Stringer/Getty Images

The Fed policy meeting Wednesday that was designed to further clarify its new stance on "average inflation targeting" — a topic addressed by multiple policymakers on its rate-setting committee in the month since it was announced — left the market with more questions than answers.

What's happening: The Fed announced that not only was it keeping U.S. interest rates at essentially zero for now but it plans to keep them there until at least 2023, extending its forecast an additional year.

  • But there were a series of contrasting messages in both the Fed's statement and in chair Jerome Powell's press conference.
  • Notably, the central bank raised its expectations for 2020 U.S. growth (to -3.7% from -6.5%), inflation (to 1.2% from 0.8%) and employment (to 7.6% unemployment from 9.3%) but also announced it was likely to crank up its stimulative bond-buying programs and keep interest rates lower for longer.

The state of play: Critics are growing louder about the lack of consistency and detail in the Fed's policies and criticism is even growing within the Fed, evidenced by two dissenting votes to its newly announced inflation goals.

What they're saying: "The Fed’s caution and patience have led to a preference for vague statements rather than firm commitments, and that dedication to flexibility has already had a consequence," Eric Winograd, senior economist for fixed income at AllianceBernstein, said in a note to clients.

  • Winograd argued that Powell's refusal to define what was meant by the words "for some time" in the statement led to the decline in stocks that pushed the Nasdaq to end the day down 1.25%.

Zoom in: "The market was looking for explicit guidance about the parameters of the new inflation framework, but the Fed chair chose not to share details," said Seema Shah, chief strategist at Principal Global Investors.

  • "He also failed to discuss how they will utilize the toolkit, leaving investors in the dark about how it will push inflation to 2%, let alone overshoot it."

Between the lines: "And if inflation met the 2% mandate consistently, would that even be a good thing for U.S. households?" BlackRock chief investment officer of global fixed income Rick Rieder asks rhetorically in a note.

  • "For most lower- and middle-income households, inflation for inflation’s sake is a drag on net disposable income and, more to the point, on quality of life."

Go deeper

Bank of Japan to assess current programs as core inflation hits 10-year low

Data: Investing.com; Chart: Axios Visuals

The Bank of Japan extended its special support programs for businesses by six months and said it would “conduct an assessment for further effective and sustainable monetary easing” after Japan’s core consumer prices fell at the fastest pace in 10 years in November.

Driving the news: November's core consumer price index decline beat out October's historic decline when consumer prices fell by what was then the fastest pace in 10 years.

Updated 2 hours ago - Politics & Policy

Virginia attorney general fires Jan. 6 investigator from university post

McIntire Amphitheater at the University of Virginia, Charlottesville, Virginia. Photo: Robert Knopes/UCG/Universal Images Group via Getty Images

The lead investigator for the Jan. 6 House select committee investigating the Capitol riot has been fired from his position as the University of Virginia's counsel by the state's new Republican attorney general, per the Washington Post.

Why it matters: Democrats say the removal of Tim Heaphy from his post after some three years while he's on leave from the university to investigate the insurrection is likely "retribution" for the House probe — an accusation strongly denied by the office of state Attorney General Jason Miyares (R).

5 hours ago - World

Taiwan's military scrambles jets after detecting 39 Chinese warplanes

J-20 stealth fighter jets in Zhuhai in the Guangdong Province of China last year. Photo: Chen Jimin/China News Service via Getty Images

Taiwan's defense force said 39 Chinese warplanes flew into its Air Defense Identification Zone (ADIZ) on Sunday.

Why it matters: The largest Chinese air force incursion into the zone since October came a day after the U.S. and Japanese navies conducted a joint exercise in the Philippine Sea.