In his latest press conference, Federal Reserve Chair Jerome Powell described the US labor market as “strong, but not overheated.” The second half of that statement is undoubtedly true. According to almost every conceivable measure of labor tightness, the US labor market has cooled off. Job openings and quits are down, unemployment is up, and wages are slowing down. But it’s unclear how much longer the US labor market can stay strong as clear signs of stabilization remain elusive. By holding off on cutting interest rates today, the Federal Open Market Committee is betting the labor market is strong enough to wait until the fall for confirmation that inflation is returning to 2%. Let’s hope it pays off.