Scott Horsley

Scott Horsley, NPR News, Washington.

Good morning.

Not entirely.

We're still seeing pretty weak hiring in the job market.

Just this week, Amazon and UPS announced big layoffs.

That said, unemployment is still relatively low, just 4.4% in December.

And

The Fed says there are some signs that the unemployment rate is stabilizing.

So for the moment, the central bank is putting its focus on inflation and prices that are still going up faster than Fed Chairman Jerome Powell and his colleagues would like.

Inflation was more like 3% in December, according to the Fed's preferred yardstick.

And Powell says a big reason for that overshoot is President Trump's tariffs.

Now, U.S.

importers have absorbed some of the tariff costs so far.

They haven't all found their way into consumer prices.

Powell thinks we are going to see some more tariff-related price hikes in the coming months.

But after that, inflation might settle down unless we get a whole bunch of new tariffs.

Not a whole lot, at least yet.

Trump has tried to fire a member of the Fed's governing board.

He's threatened to fire Powell himself.

The Justice Department even launched an investigation of the Fed over the cost of a building project here in Washington.