Marketplace · Tuesday, July 14, 2026
The Humphrey-Hawkins Act of 1978 formally established the Federal Reserve's 'dual mandate' of maintaining stable prices and maximum employment, a response to the stagflation of the 1970s. While originally intended to include a federal job guarantee, the final bill was watered down but retained the Fed's reporting requirement to Congress.
“The Humphrey-Hawkins Act says, okay, it's not just the federal government's responsibility to take care of employment and inflation. It's the Central Bank's responsibility. Say it with me now. Dual mandate: stable prices and maximum employment.”
“The law explicitly made that the Fed's job. There's a third thing in there that they never pay attention to. The little known third thing in the dual mandate, which is moderate long-term interest rates.”
“The final version of it is a much more watered down bill. It commits the United States to a lot of things, you know, maximum employment, controlling the inflation rate, but doesn't provide much in the way of enforcement mechanisms.”