The Federal Reserve was established by Congress in 1913 with the primary objectives of ensuring financial stability and preventing bank runs.  It was not until 1978, however, that the Federal Reserve’s role was modified to include a dual mandate of price stability and maximum employment.

Because of the sometimes conflicting nature of these two goals and the relative lack of control by the Federal Reserve over employment, many economists have argued for a single price stability mandate.  The JEC Republican staff commentary outlines the argument for a single price stability mandate, including an historical overview of the Federal Reserve and monetary policy in the U.S.