First, the statement reaffirms the Committee’s commitment to its congressional mandate to promote “maximum employment, stable prices and moderate long-term interest rates”. More important, the statement gives texture to those objectives in a way never before articulated. In particular, the statement’s second significant point stresses that inflation over the longer run is mainly determined by monetary policy.
In this sense, the FOMC acknowledges what every economist has known for over two centuries: inflation is a monetary phenomenon. Therefore, it is both appropriate and feasible for the monetary authority to set an inflation goal and be held accountable for achieving it.