In this instance, there is little monetary policy can do to increase employment levels. But responding by cutting rates, which seems like the right thing to do, only increases inflation further and eventually undermines job creation further as well. Like other central banks, we already include concern about growth and employment in our Taylor rule.
And because we apply the framework flexibly, we don’t respond with policy to every upward move in inflation. The difference between a flexible inflation target and a dual-mandate central bank just isn’t very meaningful. Over time, keeping  Page 8 of 11  inflation expectations low and well-anchored is the clearest and most effective way of helping the economy to achieve full employment.