Setting longer-run objectives and minimizing shorter-run fluctuations As I mentioned before, stating longer-run goals is only one part of clarifying the dual mandate. The other part involves explaining how the FOMC will conduct policy to attain its longer-run objectives over time.
Because shocks to the economy regularly push inflation and unemployment away from the Committee’s objectives, the FOMC must adjust policy to mitigate such deviations from its goals. We can therefore think of two tasks for monetary policymakers: first, setting policy to pursue the longer-run objectives; and second, adjusting policy in response to shocks to minimize shorter-run fluctuations around those objectives.