Inflation and unemployment The Federal Reserve is said to have a “dual mandate”: keeping inflation in check and the unemployment rate low. These measures, which tend to change cyclically and in concert with each other, are charted for every year since the Great Depression.



In speeches and in meetings, Ms. Yellen, the nominee for the next Fed leader, has commented on the Fed's actions during significant periods, providing a window into her views and priorities.

Latest recession Since 2007 “Three million Americans have been looking for work for one year or more; that's one-fourth of all unemployed workers. ... These are not just statistics to me. We know that long-term unemployment is devastating to workers and their families.” — Conference in Washington, Feb. 20

Ms. Yellen strongly supports the Fed’s plan to keep short-term rates near zero while the unemployment rate is still higher than 6.5 percent. She is expected to push somewhat more forcefully than the current chairman, Ben S. Bernanke, to extend the Fed's stimulus campaign and reduce unemployment.

A smaller recession 2001 “In 2001, the Fed was able to cut rates aggressively in response to the recession. ... With inflation expectations under control, we have avoided a rehash of the 1970s.”

— Conference in Washington, March 2006 As the head of a committee to improve Fed communications with the public and investors, Ms. Yellen emphasized the importance of transparency in keeping inflation in check.

Economic boom 1990s “I believe that heading toward 2 percent inflation would be a good idea, and that we should do so in a slow fashion, looking at what happens along the way.”

— Fed Open Market Committee meeting, July 1996

When Alan Greenspan, then the Fed chairman, wanted to drive the inflation rate to zero during this expansion, Ms. Yellen, then a Fed governor, argued that a little inflation was a good thing. As vice chairwoman since 2010, she has been crucial in the Fed’s adoption of a 2 percent target, set just last year.

Inflation rises Late 1960s-70s “The dismal macroeconomic record of the 1970s could have been significantly improved if the Fed had ‘taken ownership’ of the inflation situation — that is, if it had paid close and consistent attention to keeping inflation contained ... — Conference in Washington, March 2006

Disinflationary recessions Early 1980s ... the result would have been lower and much more stable inflation and unemployment, which, in turn, would have obviated the need for the painful disinflationary recessions of the early 1980s.” — Conference in Washington, March 2006