Dual mandate
MacroDefinition
The Federal Reserve's legal mandate from Congress: maximum employment AND stable prices. Most other major central banks have a single inflation mandate (ECB, BoE).
Tension between the two halves emerges in stagflation. Currently interpreted as 2% inflation target + maximum employment defined as the natural unemployment rate (~4.0-4.5%).
Tension between the two halves emerges in stagflation. Currently interpreted as 2% inflation target + maximum employment defined as the natural unemployment rate (~4.0-4.5%).