Inflation or Unemployment? Why the Fed Is So Divided: QuickTake

Determining interest rates involves a tough balancing act for the Federal Reserve, which aims to deliver price stability and full employment. Drastic policy shifts by the Trump administration in trade and immigration have brought the two sides of the central bank’s mandate into conflict. That’s provoked growing divisions over which of the two goals is more important right now among Fed policymakers.

When they decided at a Dec. 9-10 meeting to cut the Fed’s benchmark interest rate for the third time in a row, of 12 voting officials, three dissented, the most since 2019.

What is the Fed’s balancing act?

Since 1977, Congress has ...