The Federal Reserve has shifted its focus from solely addressing inflation to balancing inflation control with supporting employment. Inflation, as measured by the personal consumption expenditures (PCE) price index, held steady in July at 2.5%, while the core gauge was 2.6%. Fed Chair Jerome Powell indicated that inflation has been largely tamed through high interest rates, and the labor market is no longer overheated, with the unemployment rate rising to 4.2%. The Fed now aims for a “soft landing,” reducing inflation without triggering a recession, as job growth slows but remains positive.