Financial markets rallied today after Fed Chairman Jerome Powell clearly said that it's time to start cutting interest rates from the 5.3% level they've been for more than a year.

As John Yang tells us, the question now is by how much and how quickly fed policy makers will act.

I'm not speaking at an annual conference in Jackson Hole, Wyoming,

Powell said inflation is now low enough,

and that the bigger threat to the economy

is a weakening jobs market.

The time has come for policy to adjust. The direction of travel is clear and the timing and

pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of

risks. It seems unlikely that the labor market will be a source of

elevated inflationary pressures anytime soon. We do not seek or welcome further cooling

in labor market conditions.

Powell also addressed critics who say the Fed was slow to react to early signs of inflation.

Rachel Segal covers the Fed for the Washington Post and she's in Jackson Hole.

Rachel, you're out there with a bunch of central bankers, economists from around the world,

even some Fed policy makers.

What are they saying about not only the state of the economy as Powell described it, but also the interest rate policy pathway that he laid out.

Well, there was a lot that was quite expected in what we heard from Chair Powell this morning.

Everyone came out here expecting that he would tee up the path for a rate cut in September,

and sure enough he said the time has come.

So that was one signal that was pretty much expected across the board.

What we didn't hear from Chair Powell though

and where the conversation has now shifted

...