The dual mandate of the Federal Reserve (the Fed) is the guiding framework Congress has given it for setting U.S. monetary policy. It requires the Fed to pursue two main goals.
1. Maximize Employment - Promoting conditions that foster a strong labor market where people who want to work and find jobs.
2. Stable Prices - Keeping inflation low and predictable, so the value of money remains stable over time.
In practice, the Fed interprets this as aiming for an inflation rate of about 2% annually (as measured by the Personal Consumption Expenditures Price Index, PCE) and maintaining unemployment near it's "natural" long-run level.
Nonfarm payrolls rose just 22,000 in August, well below the forecast for over 77,000; furthermore, revisions shaved 21,000 off the prior two months and the unemployment rate climbed to 4.3%, it's highest level since 2021. The report further flames expectations for a quarter-point Fed rate cut at the central bank's September 16-17th meeting. Moreover, a half-point rate cut may be on the table to support the labor market.