The Federal Reserve is the Congressionally-authorized Central Banker for the United States. In 1977, Congress set the overall mandate of the Federal Reserve to conduct monetary policy so as to promote effectively the goals of maximum employment*, stable prices, and moderate long term interest rates. With the third goal, moderate long-term interest rates having been roundly ignored, the other two goals are commonly referred to as the Dual Mandate of the Federal Reserve: Price Stability (that is, low inflation to allow real wage growth) and Maximum Employment (which is different from maximum Labor Force Participation Rate nor Low Unemployment).

While there is currently a lot of discussion about rapidly increasing inflation and the Fed's very slow response to that (in fact, injected excess money into the economy has made it worse), let's discuss the Fed and employment goals. Should maximum employment remain as part of the official mandate? Or, should that part of the mandate be changed to either maximum Labor Force Participation Rate or to minimize Unemployment Rate?

Another alternative is that Congress change the Fed mandate so that the Fed focus is only on a monetary policy that achieves stable prices? Is any version of the employment goal an appropriate monetary policy goal or should the employment goal be a fiscal policy goal?

Other goals are proposed, like using the Fed monetary policies to enforce green results, but let's not get into that at this point.

*This is the current term. It was originally "full employment," a term than cannot possibly be met.

Added January 26, 5:30 PM EST

Some comments / definitions to help clarify things:

Maximum employment doesn't mean 100% employment, but rather the likely level of employment in normal economic conditions (neither a boom or a recession).

The labor force participation rate measures the number of people 16 or older, excluding certain groups) who are currently employed or actively looking for work in the job market. It compares the proportion of those who are either working or actively seeking work to those who are not.

The natural rate of unemployment represents the lowest unemployment rate in which inflation is stable or equivalently, the unemployment rate present when there is non-accelerating inflation.