In two days of congressional testimony, Federal Reserve Chair Jerome Powell defended his decision to keep interest rates steady and vowed Fed policy wouldn't be influenced by President Trump's pressure. Jo Ling Kent has more.

New York

Federal Reserve Chair Jerome Powell has maintained the current interest rate policy, despite criticism from President Trump, who has urged for lower rates. Powell explained to Congress that the decision was influenced by concerns over inflation, particularly due to tariffs that could cause both short-term price increases and longer-term inflation risks. 

Recent data shows a significant slowdown in the housing market, with new single-family home sales dropping nearly 14% month-to-month and existing home sales reaching their lowest point in 16 years. High mortgage rates have contributed to an increase in the supply of homes for sale, reaching levels not seen since the Great Recession. The Fed is monitoring upcoming economic indicators, including consumer sentiment and employment data, to guide future policy decisions.

Why the Fed is keeping rates steady for now

How's your day going? The Federal Reserve Chair Jerome Powell was called stupid by the president who has tried to force the independent central banker to lower interest rates. In two days of testimony in front of Congress, Powell defended his rates policy and vowed that the Fed won't be influenced by the president's pressure. CBS's Jolene Kent joins me now to talk about the economy and new signals on housing. Jolene, what reasoning did Powell give the committee for keeping interest rates as they are? John, you're right. Chair Powell was on defense. He was in the hot seat. And he essentially said that the Fed is acting cautiously because President Trump's tariffs can cause a one-time jump in prices, but there's also a risk they could trigger more persistent inflation over time. And that's a risk that he believes is large enough for the central bank to be more careful in considering more rate cuts going forward. And so as he was testifying, the president in Europe, as you mentioned, repeatedly criticized him for holding the benchmark rate study. And we still do expect to see two interest rate cuts later this year per the FOMC outlook, but there's just so much that remains completely unresolved, especially regarding tariffs. I want to ask you about housing. We got some data points, some data points on that. What do you see in those? Yeah, there's two big numbers that I'm looking at. Census data that came out today shows that new single family home sales are down almost 14% month to month. You compare it to last year, down 6%. And then we also earlier this week got existing home sales, and those came in at the slowest in 16 years. Now, a lot of this can be attributed to interest rates. Mortgage rates last month hovered around 7%. That limits what many people are able to do on the market, right? And that has the supply of homes up for sale at its highest level in three years. So if you're seeing more for sale signs, you know, your eyes aren't tricking you, but basically fewer deals are closing. And the last time supply was this high, John, was the summer of 2022 when the Fed started hiking interest rates. But before that, we haven't seen it this high since 2009 during the mortgage crisis, the Great Recession. And very quickly, what are you looking for coming up that'll give us a picture of the economy? Oh, we're looking at all kinds of data. Consumer sentiment comes out on Friday, personal spending, PCE, the June jobs report, of course, coming early next month is also very important. Excellent. Jolene Kent, thank you so much.

Russia pummeled Kyiv with the largest drone attack of the war, injuring at least 23 people and damaging buildings across the capital only hours after U.S. President Donald Trump spoke with Russia's Vladimir Putin, officials said.

Kyiv

Ukraine Invasion

Russia hits Kyiv with largest drone attack after Trump-Putin call

U.S. President Donald Trump marked the passage of the new spending bill, which includes changes to food assistance, student loan programs, and clean energy credits. Robert Costa joins "CBS Mornings" to break down what's in the legislation.

Washington

Trump set to sign "big, beautiful bill"

More than 80 Palestinians were killed in Gaza on Thursday (July 3), according to health officials, as Israel intensified its strikes, hitting a school-turned-displacement facility. CNN’s Paula Hancocks looks at the damage and humanitarian toll.

Jerusalem

More than 80 people killed in Gaza in one day

Ukrainian President Volodymyr Zelenskyy said Kyiv will do "anything" to advance EU accession talks. Zelenskyy spoke alongside Danish Prime Minister Mette Frederiksen, President of the European Council António Costa and President of the European Commission Ursula von der Leyen.

Ukraine will do 'anything' to advance EU accession talks: Zelenskyy

President Donald Trump said Washington will start sending letters to countries on Friday specifying what tariff rates they will face on imports to the United States, a clear shift from earlier pledges to strike scores of individual deals.

Global Tariffs

Trump: Letters telling countries their tariff rate going out Friday

Indonesian rescuers on Thursday (July 3) temporarily halted a search for 30 people still missing after a ferry carrying 65 people sank near the island of Bali with the loss of six lives, the national search and rescue agency said.

Gilimanuk

Indonesia suspends search for 30 missing after ferry sinks near Bali

After marathon debate sessions in the Senate and House, President Donald Trump’s budget bill passed in the House. Republicans secured the biggest win of Trump’s presidency.

Trump’s landmark ‘big, beautiful bill’ narrowly passes U.S. House

Florida says the first group of migrant detainees have arrived at the new immigration detention center known as "Alligator Alcatraz." CBS News correspondent Shanelle Kaul has more.

Ochopee

First group of detainees arrive at "Alligator Alcatraz," Florida says

U.S. President Donald Trump said Thursday (July 3) that he spoke with Russian President Vladimir Putin and that he plans to hold a call with Ukrainian President Volodymyr Zelenskyy. CBS News White House reporter Willie James Inman has more.

Trump speaks with Putin, plans call with Zelenskyy

CNN’s Priscilla Alvarez reports on a lawsuit from lawyers for Kilmar Abrego Garcia alleging he suffered “torture and mistreatment” after he was wrongfully deported and held in El Salvador’s notorious mega prison.

Tecoluca

Kilmar Abrego Garcia claims he was tortured in El Salvadoran prison

The Kremlin welcomed the development, with spokesman Dmitry Peskov claiming it proves Western arsenals are being depleted and predicting that less aid will hasten the end of the conflict.

U.S. pauses military aid to Ukraine over depleted weapons stockpile

Two contractors employed by UG Solutions spoke to the AP on condition of anonymity as they were revealing their employers’ internal operations.

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Democratic leader Hakeem Jeffries spoke for hours on the House floor about potential impacts of President Trump's "big, beautiful bill" that Republicans are looking to pass before July 4. Following debate, the House is set for a final vote on the massive budget bill.

House debates Trump's 'big, beautiful bill' ahead of final vote

CBS News political contributor Caroline Polisi joins "CBS Mornings" to break down the jury's verdict in Sean "Diddy" Combs' federal trial and the judge's decision to deny bail for the music mogul ahead of his sentencing.

Manhattan

Sean "Diddy" Combs denied bail after split verdict

Liverpool soccer player Diogo Jota has died aged 28, just weeks after marrying his childhood sweetheart. The footballer passed away in a car crash in northern Spain.

Madrid

Liverpool soccer player dies in car crash 10 days after wedding

The Pentagon said that U.S. strikes 10 days ago had degraded Iran's nuclear program by up to two years, suggesting the U.S. military operation likely achieved its goals despite a far more cautious initial assessment that leaked to the public.

Tehran

Iran Strikes

Iran nuclear program degraded by up to two years: Pentagon

Days before his 90th birthday, the Dalai Lama announced the Gaden Phodrang Trust, a non-profit he founded, will have the sole authority to recognize his future reincarnation, but China insists it will choose the successor of the Tibetan spiritual leader.

Lhasa

China rejects Dalai Lama’s succession plan

The U.S. Congress inched towards approving President Donald Trump’s Big Beautiful Bill, despite attempts by Democrats to stop it. The bill is Trump’s signature legislation which includes massive spending increases on the military and immigration enforcement while slashing social programs.

Trump’s Big Beautiful Bill nears approval

Sean (Diddy) Combs was found guilty on prostitution-related charges, but was acquitted on more serious charges of racketeering and sex trafficking giving him a maximum sentence of 20 years. But the courtroom victory was subdued following a judge’s ruling to deny him bail.

Diddy denied bail, avoids life in prison

President Trump says Israel has agreed to a 60-day ceasefire in Gaza, but it remains unclear if Hamas will accept the terms. CBS News senior foreign correspondent Debora Patta has more.

Trump says Israel has agreed to Gaza ceasefire conditions

Bryan Kohberger changed his plea to guilty Wednesday for the 2022 murders of four University of Idaho students. CBS News national correspondent Carter Evans has more on the case.

Boise

New details revealed as Kohberger pleads guilty for 2022 Idaho murders

The Wisconsin Supreme Court struck down a state abortion law that was adopted in 1849 in a 4-3 landmark decision. CBS News' Shanelle Kaul reports.

Madison

Wisconsin Supreme Court strikes down 176-year-old state abortion ban

Macron and Putin held regular discussions around the start of Russia's invasion of Ukraine, with Macron visiting Putin in Russia in February 2022, but dialogue eventually stalled.

Paris

Macron held 'substantial' phone call with Putin

President Trump toured “Alligator Alcatraz,” a migrant detention center he teamed up with Ron DeSantis to build in the Everglades.

Everglades

Protesters gather around ‘Alligator Alcatraz’ as President Trump visits

Jurors in Sean “Diddy” Combs’ federal criminal trial said they have reached a verdict on four of the five counts, but they cannot reach a verdict on Count 1, which is racketeering conspiracy. The judge has instructed the jury to keep deliberating. Deliberations will resume Wednesday (July 2).

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The U.S. Senate passed the Republicans' reconciliation bill on Tuesday (July 1) after more than 24 hours of marathon voting on amendments. Vice President JD Vance cast the tie-breaking vote.

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The new order does not rescind existing sanctions on ousted longtime President Bashar al-Assad, his top aides, officials and family members who are accused of having committed war crimes and human rights violations against Syrian civilians.

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Former criminology graduate student Bryan Kohberger has agreed to plead guilty to killing four Idaho college students in 2022, a move that would spare him the death penalty under a deal with prosecutors, ABC News reported on Monday (June 30).

Moscow

Suspect in murders of four Idaho college students to plead guilty

Thailand's Constitutional Court on Tuesday suspended Prime Minister Paetongtarn Shinawatra from duty pending a case seeking her dismissal, adding to mounting pressure on a government fighting for survival on multiple fronts.

Bangkok

Thai court suspends PM from duty pending case seeking her dismissal

Israeli strikes killed at least 60 people across Gaza on June 30 in some of the heaviest attacks in weeks as Israeli officials were due in Washington for a new ceasefire push by U.S. President Donald Trump.