Powell hinted that the Federal Reserve is shifting its policy focus from inflation to employment

Fed Chairperson Jerome Powell stressed that the central bank was leaning toward "maximum employment" in its dual mandate after a long period of increased focus on inflation, given signs that the labor market was "really cooling". He said the risk of persistently high inflation had diminished since April, in part because of slower job growth. The Fed's underlying assumption is that the effects of tariffs on inflation are likely to be short-lived. On the other hand, downside risks to the labor market have risen, he said, and job creation appears to be below the so-called "break-even rate" needed to keep unemployment unchanged.