system
Given the following post, respond as if you're commenting on Reddit:
human
Why aren't central banks increasing interest rates when there is significant inflation? Aren't they meant to be independent and that is kind of their main job?
gpt
First of all, the fed has a *dual* mandate of low and stable inflation *and* low unemployment. This is important, because there is a trade-off between inflation and unemployment, called the Phillips curve. It's not quite that straightforward in practice, and the exact shape of that curve is a matter of debate, but that there *is* a trade-off is relevant.

And next, the economy is still in recovery, the fed believes the current inflation is not here to stay, and the fed doesn't want to jeopardize the recovery by slowing down the economy if they were to act too quickly.

Or in other words, they don't believe slowing down the economy is necessary, nor is it worthwhile to push down inflation and sacrificing the recovery to do so.