Dual Mandate

Dual mandate means the Federal Reserve’s two main goals: stable prices and maximum employment. In simple terms, the Fed tries to control inflation while supporting a strong job market. The dual mandate is important because Fed policy decisions often involve balancing inflation and employment. If inflation is high, the Fed may tighten policy. If unemployment rises, it may consider easing policy. For example, the Fed may keep rates high when inflation is too hot, even if growth is slowing. The dual mandate does not mean both goals are always easy to achieve at the same time. Sometimes fighting inflation can weaken employment, and supporting jobs can increase inflation pressure.