Powell hints Fed is shifting policy focus from inflation to employment

Federal Reserve Chairman Jerome Powell emphasized that given signs that the labor market is "really cooling," the Fed is leaning toward achieving "maximum employment" in its dual mandate after a long period of increased focus on inflation. He said the risk of persistently high inflation has decreased since April, partly due to slower job growth. The Fed's baseline assumption is that the impact of tariffs on inflation is likely to be short-lived. On the other hand, he said, downside risks to the labor market have increased, as job creation appears to be below the so-called "break-even rate" needed to keep the unemployment rate unchanged. (Jinshi)