Inflation Mandate

Inflation mandate means a central bank’s responsibility to keep inflation stable or near a target. In simple terms, it is the central bank’s job to control inflation. The inflation mandate is important because it guides central bank decisions on interest rates and monetary policy. If inflation is too high, the central bank may raise rates or keep policy restrictive. For example, the Fed aims to keep inflation around its long-term target, so high inflation can lead to tighter policy. The inflation mandate is not the only goal for every central bank. Some central banks also consider employment, financial stability, or growth.