These challenges led to legitimate questions among forecasters and the public about just what the FOMC meant by “maximum employment” and “stable prices.” The FOMC could have chosen to adopt an “inflation-targeting framework,” in which it would have specified an objective solely for inflation, without any explicit reference to employment.
Such an approach has been adopted by a large number of central banks since the 1990s. While the FOMC had debated adopting an inflation target on a number of occasions since the mid-1990s, some Committee members believed that stating an explicit target for inflation alone would undermine the maximum-employment side of the dual mandate.