Dual Mandate.
In plain English
The dual mandate is the two-part job Congress gave the Federal Reserve: stable prices and maximum employment. In practice, stable prices means keeping inflation low and steady, around 2 percent, and maximum employment means as many people working as the economy can support without stoking inflation. The two goals can pull in opposite directions, because cooling inflation with higher rates can slow hiring. Much of what the Fed does is a balancing act between these two duties.
01Why it matters
The dual mandate explains why the Fed sometimes raises rates even when it hurts jobs, or holds them low despite some inflation: it is always weighing both goals.
02The math, step by step
Inflation is high but hiring is strong, so the Fed raises rates to cool prices, accepting some slowdown in jobs as the tradeoff its dual mandate forces.
03What this is NOT
The dual mandate is NOT only about inflation. The Fed must weigh maximum employment too, which is why it does not just crush inflation at any cost to jobs.
04Receipts
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