First it has to gauge how close the economy is to the first mandate (maximum employment) and is then used to predict the second mandate (the inflation rate).
That strategy derives from the Fed´s (and Yellen´s) firm belief in the Phillips Curve, the theory that there is (in some form) an inverse relation between the unemployment rate and the rate of inflation.
But, naturally, there isn´t. So the Fed is “chasing rainbows” and, apparently, wants to continue to do so.
They could take a leaf from Nick Rowe, and start acting very differently:
The business cycle is a monetary exchange thing.
Which would tell them they are on the wrong track!