Powell hints that the Fed is shifting policy focus from inflation to employment

Fed Chairman Jerome Powell stressed that given the signs of a “real cooling” of the labor market, the Fed is inclined to achieve “full employment” in its dual mission after long-term high attention to inflation. He said the risk of continued high inflation has declined since April, partly due to slower employment growth. The Fed's basic assumption is that the impact of tariffs on inflation may be short-lived. On the other hand, he said the downside risk in the labor market has risen because job creation appears to be below the so-called “break-even rate” required to keep the unemployment rate unchanged. (Golden and Stone)