Fed cuts interest rates 0.25 percentage points

Yeah. First rate cut, though, of this year after Fed Chair Powell has faced, as you know, significant scrutiny from President Trump for not lowering these rates sooner. How did the central bank finally come to this decision today? So it was a mix of looking at where inflation is expected to go and how it's risen over the past couple of months-- again, not the runaway inflation that economists predicted when it came to these tariffs. Doesn't mean that we won't see that over the next few months, but that it hasn't appeared yet. And so we will hear more from Chair Powell at 2:30 in the press conference. But you can tell by the fact that we got a rate cut, they prioritize the labor market, that, hey, we have seen anemic growth over the past few months. And that was what was really the winner in terms of whether you cut rates or you don't.

And Kelly, at this point, still only September with two more Fed meetings left this year. What will the Fed, do you imagine, what will they be looking at in terms of inflation and how this cut will impact interest rates decisions for those final meetings? So I actually have it pulled up right now. So we get economic projections. This just broke. So bear with me as I look through it. We actually do. The Fed is expecting to cut rates based on these new economic projections at the next two meetings. And you would likely see, based on this, a quarter point in October and a quarter point in December. Doesn't mean they can't change if new inflation data comes out, and it's too high. But what they are expecting is 3% inflation by the end of the year-- that's right about where we are-- and the unemployment rate to tick up to 4.5%. So based on where we were when they released these predictions in June, they're seeing the unemployment rate higher by the end of the year versus that, and the inflation rate staying the same as those June projections. And that's exactly why you're seeing them expect to cut rates in the next two meetings. So we will wait for Chair Powell to hear more. But certainly, that's also why the investors were celebrating, because the two more rate cuts, investors like that. Absolutely. Kelly O'Grady, thank you very much. We really appreciate it. And let's bring in CBS News senior White House and political correspondent Ed O'Keefe, who joins us now from Windsor Castle, where President Trump is on a state visit right now with King Charles today. Ed, the president just got this interest rate cut that he has been calling for, for quite some time at this point. How significant is this decision for the administration? It will be seen as significant. But the president is likely to say in the coming hours or days that it is too late. And that is, of course, what he calls Chairman Jerome Powell, Chair Jerome "Too Late" Powell, because he's been too late to cut these rates. That said, it comes amid this trip that the president is on, a pretty good day for him. And this is just going to add to the goodness of the day. The White House has been calling for this. Of course, the Federal Reserve is independent from the White House, from any president. But the inevitable now has happened, at least the inevitable in the minds of the president. And again, likely to argue that it's too little, too late.