Jerome Powell wants to quell inflation without sinking the labor market. His success or failure in this quest will be a defining part of the Federal Reserve chair's legacy and the pro-employment policy he's championed.

"Can we cool down—sort of—labor demand without causing employment to fall?" Fed Governor Christopher Waller asked on April 11. He sounded cautious, calling interest rate policy a "brute force" hammer that sometimes breaks things: "That's the tricky road that we're on."

What happens to the U.S. job market, where unemployment currently stands at an ultra-low 3.6 percent, will rank alongside Powell's widely praised emergency pandemic response in dictating how history remembers his two terms at the helm of the world's most powerful central bank.

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