Powell Defines the Fed’s Third Mandate, Calling It a Derivative of the Other Two Tasks

Jinse Finance reported that Federal Reserve Chairman Powell, during a press conference following Wednesday's interest rate decision, explained why the three mandates given to the Federal Reserve by Congress can, in practice, be summarized into two main tasks when responding to questions about the central bank's statutory requirement to achieve a "moderate long-term interest rate." For a long time, central bank officials have positioned their mission as a dual mandate, focusing monetary policy on maintaining low and stable inflation and ensuring a strong and sustained job market, with little emphasis on the third mandate. Powell told reporters that the third mandate does exist, but in the eyes of central bankers, it is a derivative of the two more widely recognized legal objectives. He said, "We believe that a moderate long-term interest rate is the result of achieving low and stable inflation and maximum employment." For some time, Federal Reserve officials have not considered the third mandate to require "independent action." (Golden Ten Data)