The Federal Reserve works to promote a strong U.S. economy. Specifically, Congress has assigned the Fed to conduct the nation's monetary policy to support the goals of maximum employment and stable prices. Those two goals are often referred to as the Fed's "dual mandate."
Maximum employment is the highest level of employment or lowest level of unemployment that the economy can sustain while maintaining a stable inflation rate. Maintaining maximum employment for a sustained period can result in many benefits and opportunities to families and communities that often had been left behind.
Prices are considered stable when consumers and businesses do not have to worry about costs significantly rising or falling when making plans, or when borrowing or lending for long periods. The Federal Open Market Committee judges that an inflation rate of 2 percent over the longer run, as measured by the annual change in the price index for personal consumption expenditures, is most consistent with the Fed's price mandate. When households and businesses can reasonably expect 2 percent inflation over the longer run, they are better able to make sound decisions regarding saving, borrowing, and investment, thus contributing to a well-functioning economy.
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Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue N.W., Washington, DC 20551
