Inflation is cooling—Fed Reserve statements of a downward trend prove it’s no longer as pressing of an issue.

For more than two years, inflation has eclipsed everything else at the Federal Reserve. In a shift eagerly awaited by global markets, that’s poised to change.

US central bankers are ready to cut interest rates in September amid growing confidence that price stability is within sight – while risks to the labor market have grown. They’ve laid the groundwork for the coming move in speeches over recent weeks, and Chair Jerome Powell will likely flag it more explicitly after a policy meeting on July 30-31.

It’s not quite a done deal. Fed officials still want to see monthly price numbers continuing to trend down toward their 2% annual inflation goal before they commit to lowering borrowing costs from a two-decade high. But Powell and his colleagues are also determined not to squander the chance of sticking a soft landing for the US economy, which is showing at least a few signs of losing steam.

“It’s not just about getting inflation down,” Powell told House lawmakers on July 10. “We need to be mindful of where the labor market is.”

The Fed’s preferred inflation gauge has eased to 2.6%, and the once overheated labor market has cooled to pre-pandemic levels. While officials continue to describe the labor market as strong, they have also said it may be nearing a turning point, with a steady decline in vacancies and a gradual pickup in unemployment.

“I do believe we are getting closer to the time when a cut in the policy rate is warranted,” Fed Governor Christopher Waller said Wednesday. The labor market is in a “sweet spot,” he said, but the Fed needs to keep it there.