Federal Reserve Loretta Mester: Labor market has weakened.

Dallas Fed President Robert Kaplan expressed optimism that inflation will continue to fall towards the Federal Reserve's 2% target this year, but he noted that he is still aware of the risks of progress stalling. Kaplan warned that pro-business tax policies, the active state of the financial markets, and the ongoing price increases caused by the Trump administration's tariffs could all push up prices. She acknowledged that the labor market has weakened, a development that prompted the Fed to cut interest rates three times between September and December last year, but she said that job prospects may now be stabilizing. She said that since mid-2025, "monthly job growth has remained around the break-even level estimated by our staff to maintain a stable unemployment rate," and added, "job growth has not shown a further slowdown trend."