What is the statement on longer-run goals and monetary policy strategy and why does the Federal Open Market Committee put it out?
In January 2012, the Federal Open Market Committee (FOMC) first published a "Statement on Longer-Run Goals and Monetary Policy Strategy." The Committee has reaffirmed the Statement each January since then. The publication of a statement on longer-run goals helps hold the Fed accountable; it also helps the public understand how the FOMC interprets its statutory mandate to promote maximum employment and stable prices.
In the statement, the FOMC says that it judges that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the Federal Reserve's statutory mandate. The Committee states that it would be concerned if inflation were running persistently above or below the 2 percent objective. In addition, the document notes that the FOMC's policy decisions will be informed by its assessments of the maximum level of employment, recognizing that such assessments are necessarily uncertain and subject to revision. In setting monetary policy, the FOMC seeks to mitigate deviations of inflation from its longer-run goal and deviations of employment from the FOMC's assessments of its maximum level.
Statement on Longer-Run Goals and Monetary Policy Strategy (PDF)
Amended January 31, 2017