Balancing Act: The Dual Mandate on an Economic Tightrope

Beth Hammack
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Beth Hammack: https://www.clevelandfed.org/people/profiles/h/hammack-beth-m

Speech from Federal Reserve Bank of Cleveland

Abstract: Speaking at the Economic Club of New York, President Hammack discussed the dual mandate as a balancing act: The concept of balance is at the heart of the FOMC’s Statement on Longer Run Goals and Monetary Policy Strategy. In the most recent update to the statement, the Committee said that it would follow a balanced approach to promoting its goals during times when the objectives are not complementary—which is a fair characterization of today’s situation, with both inflation and employment under pressure. We need to assess how much and for how long we are missing on each side of the mandate and then determine which way policy should tilt to compensate for those misses. Applying this framework to the current economic environment, I remain concerned about high inflation and believe policy should be leaning against it. After last week’s meeting, I see monetary policy as barely restrictive, if at all, and it’s not obvious to me that monetary policy should do more at this time. But the future is inherently uncertain, and I’m watching developments closely. So let me share in more depth what I’m seeing in the economy that frames my view of appropriate policy.

Pages: 12
Date: 2025-11-06
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