The Price Stability Act Nukes the Fed's Job Mandate: What That Means for Your Next Paycheck

The newly proposed Price Stability Act of 2025 is short, but it packs a serious punch by completely rewriting the job description of the Federal Reserve. For decades, the Fed has operated under a "dual mandate," meaning it had two main goals: keeping prices stable (low inflation) and pursuing maximum employment (getting as many people working as possible). Section 2 of this bill scraps half of that mission. Going forward, the Fed’s sole legal requirement would be maintaining stable prices.

The Fine Print: Losing Half the Mission

Think of the Fed as a central bank trying to drive a car with two passengers shouting directions: one passenger cares only about the speedometer (inflation), and the other cares only about how many people they pick up along the way (jobs). This bill kicks the jobs passenger out. By removing the requirement to actively pursue maximum employment from Section 2A of the Federal Reserve Act, the Fed is legally absolved of worrying about unemployment figures when setting interest rates or making other monetary policy decisions. Their focus narrows exclusively to inflation control.

Why This Matters for Your Wallet and Your Job Security

In the real world, this change is huge. When the economy is running hot and inflation is high, the Fed’s traditional tool is raising interest rates, which slows down the economy and often leads to job losses. Under the current dual mandate, the Fed has to weigh those job losses against the need to fight inflation. This bill removes that balancing act. If the Fed sees inflation, even modest inflation, they are legally obligated to fight it, even if it means driving unemployment up to 6% or 7%.

For workers, especially those in sectors sensitive to economic slowdowns—like construction, manufacturing, or service industries—this is a significant shift. If you are a young person looking for your first career job, or a trade worker reliant on project financing, a Fed focused only on price stability might be quicker to trigger a recession to cool prices down. The burden of fighting inflation is often borne disproportionately by those who lose their jobs, while the benefit of lower prices is spread across everyone. This bill essentially prioritizes the financial security of those whose savings are eroded by inflation over the job security of those whose wages rely on a strong labor market.