Inflation Report Beats Expectations, Dems Face Shutdown Pressure, Trump Warns Russia: AM Update 3/13

Good morning, everyone. I'm Megan Kelly.
It's Thursday, March 13th, 2025, and this is your AM update. I think the markets are going to soar.
There's tremendous optimism out there. The White House touting better than expected inflation numbers as markets shake in anticipation of further tariffs.
And I think that's one of our core responsibilities in the Senate or in the government here to ever allow the government to shut down. Despite earlier tough talks, some Democrats balk at the prospect of a government shutdown.
President Trump suggests he's ready to inflict economic pain on the Russians as Kremlin officials react coldly to calls for a ceasefire. All that and more coming up in just a moment on your AM update.
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Some good economic news for President Trump. The inflation rate declined more than expected in February, coming in at 2.8 percent, down from 3.0 in January.
The core inflation rate, which excludes more volatile items like food and energy, also cooled to 3.1 percent, down from 3.2. Both figures coming in lower than analysts had predicted.
The Federal Reserve's target rate for inflation is 2%. GasBuddy reporting the average price of gas dropping for the third straight week, now at $3.03 per gallon.
That's the lowest average price for gasoline in the month of March since 2021. President Trump reacting positively to the news from the White House.
I think the markets are going to soar. There's tremendous optimism out there about our country.
In terms of regulations being cut, in terms of taxes being cut, oil is down to $65 a barrel. And that's faster than I would have.
We put on the gas, we stepped in the gas in order to get oil. A key piece of the Trump administration's economic plan, unlocking oil production.
On his first day in office, Mr. Trump signing orders increasing oil and gas drilling on public lands and offshore areas, reversing previous restrictions.
Some additional context, putting the new economic numbers in perspective. The only tariffs in place in February were the initial 10 percent duties on Chinese imports.
Wednesday markets swinging wildly, the S&P 500 and Nasdaq ultimately rising as investors weigh a solid inflation report with anticipation of more expected tariff increases. President Trump, seated next to Irish Prime Minister Michal Martin in the Oval Office, again signaling his trade war is just getting started.
The EU was set up in order to take advantage of the United States. Including Ireland? Is Ireland taking advantage of the US? Of course they are.
We had leaders that didn't have a clue. Or let's say they weren't business people, but they didn't have a clue what was happening.
And all of a sudden, Ireland has, you know, our pharmaceutical companies. When the pharmaceutical companies started to go to Ireland, I would have said, that's okay if you want to go to Ireland.
I think it's great. But if you want to sell anything into the United States, I'm going to put a 200% tariff on you.
So you're never going to be able to sell anything into the United States. You know what they would have done? They would have stayed here.
Next week, the Federal Reserve is set to announce a decision on interest rates. While President Trump has repeatedly called for the rates to be lowered, the Fed operates independently from the government.
Last Friday, Fed Chair Jerome Powell saying they're in no hurry to make any adjustments, suggesting interest rates are likely to stay in their current range, 4.25 to 4.5 percent. A new CNN poll shows Americans may be souring on the tariff wars, 61 percent of Americans disapproving of the use of tariffs compared to 39 percent who approve.
Overall, on the economy, 56 percent say they disapprove versus 44 percent approving, worse than at any point during President Trump's first term in office. The government shutdown deadline ticking even closer now as the Senate weighs this six-month funding extension.
The bill requires 60 votes to pass in the Senate, meaning some Democrat support is required. In the lead-up to the House vote on Tuesday, Senate Dems talking tough, calling the bill horrible and a power grab by President Trump and Elon Musk.
Now, with the possibility of forcing a shutdown in their hands, some Dems are balking. We don't agree with what's been sent to us, but, you know, if we withhold our votes, that is going to shut the government down.
And I think that's one of our core responsibilities in the Senate or in the government here to ever allow the government to shut down. We could wind up in a situation where maybe this administration decides to leave parts of the government that provide valuable services to the American people closed permanently.
Pennsylvania Senator John Fetterman telling reporters he will vote yes. The Hill reporting one unnamed Senate Democrat saying, quote, I can't say we have a strategy.
There are a lot of people who haven't made a decision. Independent Senator from Maine, Angus King, who typically votes with the Democrats, telling The Washington Post, quote, it's a choice between two terrible alternatives.
Some Dems are worried a shutdown will backfire on them, allowing the Doge team to permanently shutter even more of the government. In a shutdown, non-essential employees are furloughed and essential employees continue working.
The Post reporting some Dems argue a shutdown could allow Doge to more easily cut the employees deemed non-essential. Democrat Senator from Virginia, Tim Kaine, leaving his options open, telling Politico he would like some amendments added to this bill.
However, any additional amendments would need to be approved by the House, which is not likely to agree on anything that increases government spending. The deadline is 11.59 p.m.
on Friday. Senate Majority Leader Chuck Schumer saying his party is united, which is not true, and that right now the GOP does not have the votes to avoid a shutdown.
Coming up, U.S. diplomats bringing an offer of peace to the Kremlin as President Trump suggests a willingness to ratchet up pressure on the Russians and the Department of Education slashed by a whopping 50 percent.
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you. Russia's military advances in Ukraine as the U.S.
sends an envoy to the Kremlin to pursue a ceasefire. The Russian army is close to surrounding 10,000 Ukrainian troops in the Kursk region of Russia.
Ukraine captured this bit of Russian territory last August, once floating the idea of exchanging it back for captured Ukrainian territory. Most of it, however, has been regained by Russia, but not all.
In recent days, the Ukrainian hold on the area falling into serious jeopardy, with Russian President Vladimir Putin on Wednesday telling his forces any captured Ukrainian soldiers in Kursk will be treated as terrorists. As the battlefield erupts in chaos, peace negotiators diligently strive to broker a ceasefire.
President Trump and Vice President J.D. Vance expressing cautious optimism on the next stages of ending the war.
We've got some conversations that are happening on the phone and in person with some of our representatives over the next couple of days. As the president said, we think that we're in a very good place

where the Ukrainians have agreed to a ceasefire,

and we're now going to see whether we can get the Russians to agree to a ceasefire too.

I hope he will keep the ceasefire, considering that he's broken them in the past.

We haven't spoken to him yet with substance,

because we just found out and we just were able to get Ukraine to agree.

So we're going to know very soon.

I've gotten some positive messages, but a positive message means nothing. This is a very serious situation.
Secretary of State Marco Rubio plainly laying out the stakes for both sides. There is no military solution to this conflict.
Neither side can militarily achieve their maximalist gains, their maximalist goals. Neither side can achieve them through the military side.

The only way this conflict can end is through negotiation. That's the only way you're going to have peace.
Special Envoy Steve Witkoff is traveling to Russia for in-person negotiations. In advance of his arrival, Kremlin officials responding coldly to the Ukrainian acceptance of a ceasefire.
The Guardian reporting a Russian foreign ministry spokesperson as saying, quote, Moscow will make its own decisions about the war and not follow the lead set by Washington and Kyiv. Mr.
Lavrov adding, quote, it is impossible to rely on the goodwill of opponents who have declared the goal of inflicting strategic defeat on Russia. Despite earlier Western criticism that President Trump was too lenient on Russia in negotiations, Mr.
Trump now signaling a willingness to apply plenty of pressure, just as he did with Ukraine.

There are things you could do that wouldn't be pleasant in a financial sense.

I can do things financially that would be very bad for Russia.

I don't want to do that because I want to get peace.

But in a financial sense, yeah, we could do things very bad for Russia.

It would be devastating for Russia, but I don't want to do that. President Trump taking the most dramatic action yet to put an end to the Department of Education, slashing its workforce by 50 percent.
The move marking a significant escalation in his longstanding push to reduce the federal government's size and specifically its role in education. The department, enshrined in a law by Congress, would require an act of Congress to be fully abolished, but with a divided legislature, that battle could take years.
In the meantime, Education Secretary Linda McMahon telling Fox exactly what was cut and what stays, at least for now. We wanted to make sure that we kept all of the right people, the good people, to make sure that the outward-facing programs, the grants, the appropriations that come from Congress, all of that are being met, and none of that's going to fall through the cracks.
Congress appropriates the money that is going through Title I, through IDEA programs. What's that stand for? Well, do you know what? I'm not sure I can tell you exactly what it stands for, except that it's the programs for disabled and needs.
Individuals with Disabilities Act. The administration insisting essential, congressionally mandated funding remains intact.
Heads of the teachers unions arguing the cuts are an attack on public education. It's a disaster symbolically as much as it's a disaster in reality.
Think about a country whose president basically says as their first acts, I'm getting rid of education. Let's be clear.
This administration is focused on destroying public education. Since the inception of the Department of Education in 1979, spending on public education has skyrocketed.
U.S. public schools spend an average of more than $16,000 per student each year, a 13 percent increase over the previous 10 years.
In that same time, overall, test scores have shown little to zero improvement. President Trump telling reporters the education department is the easiest to make cuts from.
But now the Department of Education, maybe more so than any other place, has a lot of people that can be cut. They're number one, not showing up to work.
Number two, they're not doing a good job. And if you look at the charts, because they have numerous charts where they do the top 40, we're at number 37, 38, 39 and and 40.
And recently they hit, during Biden's last few days, they hit last. So they were number 40, and yet we're number one in cost per pupil.
We're going to move the Department of Education, we're going to move education into the states so that the states, instead of bureaucrats working in Washington, so that the states can run education. The Trump administration aims to restructure education funding, focusing on block grants that would allow states more freedom to choose how to educate their students.
Former Columbia University student agitator Mahmoud Khalil remains in a Louisiana ice detention facility today. Mr.
Khalil did not attend Wednesday's packed courthouse hearing, the first step in his court battle to prevent deportation. Mr.
Khalil born in Syria. Khalil filed his challenge in the Southern District of New York, government officials requesting a change of venue, arguing that the SDNY is not the appropriate jurisdiction.
It's also not the most conservative one. Federal prosecutors urging the judge to move the trial to New Jersey, where Mr.
Khalil was first detained, or to Louisiana, where he is currently being held. Khalil was a prominent organizer of the Columbia University protests last year that led to clashes with police and

more than 100 arrests. Students established a Gaza Solidarity encampment on campus, often chanting anti-Israel, anti-Semitic slogans and blocking Jewish students' access to campus spaces.
The group Mr. Khalil represented as a master's degree candidate, Columbia University apartheid divest, reportedly sympathizes with terrorist groups Hamas and Hezbollah and seeks the, quote, end of Western civilization.
Mr. Khalil's attorney saying in a statement their client was, quote, chosen as an example to stifle entirely lawful dissent in violation of the First Amendment.
Secretary of State Marco Rubio, who oversees green card allocation, responding on Wednesday. No one has a right to a green card, by the way.
So when you apply for a student visa or any visa to enter the United States, we have a right to deny you for virtually any reason. But I think being a supporter of Hamas and coming into our universities and turning them upside down and being complicit in what are clearly crimes of vandalization, complicit in shutting down learning institutions.
There are kids at these schools that can't go to class. You're afraid to go to class because these lunatics are running around with covers on their face, screaming terrifying things.
If you told us that's what you intended to do when you came to America, we would have never let you in. Mr.
Khalil's lawyers are expected to file an updated version of their petition later today. And that'll do it for your AM update.
I'm Megan Kelly. Join me back here all week for our special series, Megan Kelly Investigates on the disappearance of baby Lisa Irwin, a 10-month-old girl who disappeared from her crib in the dark of night.
It will air on Sirius XM Triumph Channel 111 at noon east, on youtube.com slash Megan Kelly, and all podcast platforms on the Megan Kelly Show feed. As a business owner, you wear a lot of hats.
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