A character can gain bonuses or penalties to their rolls based on their Morale. Everyone begins at a Morale of 0. For every positive Morale point, their Target Number for all actions is increased by 1. For every negative Morale point, all Target Numbers are reduced by 1.
Morale is lowered by being hurt and by successive failures. If a character fails three action rolls in a row (regardless of the time between them), their Morale goes down 1 point. If they fill an entire fate level (see Damage and Death), they lose 1 point. Characters cannot go below -3 Morale.
Morale is raised when characters succeed and when they are inspired. If a character succeeds at three action rolls in a row (regardless of the time between them), their Morale goes up 1 point. They also gain a point if they achieve their Goal (see Goals above). If a character is inspired, they receive a Morale point. Characters are inspired by other characters. The “inspirer” makes an opposed Appeal roll against the “inspiree.” If the former succeeds, they say or do just the right thing to infuse the target with renewed confidence for two minutes.
Also in the rare instance a character heals down a fate level, they regain 1 Morale point. Characters cannot go above 3 Morale.