https://www.stlouisfed.org/in-plain-english/the-fed-and-the-dual-mandate
“Keeping our economy healthy is one of the most important jobs of the Federal Reserve. The Federal Reserve System has been given a dual mandate—pursuing the economic goals of
maximum employment and
price stability. It does this by using a variety of policy tools to manage financial conditions that encourage progress toward its dual mandate objectives—in other words, conducting monetary policy.”
“
Are the Fed’s Dual Mandate Goals Complementary?
The Fed’s goals of maximum employment and price stability are generally complementary. An economy with low and stable inflation provides economic conditions that are friendly to business planning, saving, and investing, which results in a growing economy. A growing economy needs workers to produce goods and services. Of course, there are times when the goals are not complementary. In the late 1970s and early 1980s, for example, the economy experienced both high inflation and high unemployment (low employment). The Fed decided to reduce the high inflation rate by raising interest rates to very high levels, which contributed to two back-to-back recessions. Over time, inflation returned to a low and stable level, the economy recovered and the unemployment rate fell, which means that employment levels rose toward maximum employment.”
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