Dual mandate
The two goals Congress set for the Federal Reserve: maximum employment and stable prices.
The Federal Reserve Act directs the Fed to promote “maximum employment, stable prices, and moderate long-term interest rates.” Three goals are named in the statute; the conventional shorthand is “dual mandate”, because moderate long-term rates are generally understood to follow from achieving the first two rather than being pursued separately.
Neither goal is defined numerically in the statute. The Fed has adopted an explicit 2% target for inflation, measured by the price index for personal consumption expenditures. It has deliberately not adopted a fixed numerical target for employment, on the reasoning that the maximum sustainable level of employment changes over time and is not directly measurable.
The two goals can conflict. Policy tight enough to bring inflation down can raise unemployment; policy loose enough to support employment can let inflation run. When they conflict, the committee has to choose, and it says so in the statement.
It is the frame for nearly every FOMC statement. When the two goals point in opposite directions, the statement language is where the committee's choice shows up first.