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U.S. Inflation Rises 7.5 Percent in Last Year, 40-Year High; Canadian Trucker Protests Impact Auto Production, Trade, Could Disrupt Super Bowl; House Oversight Committee Probes Trump's Handling of White House Records. Aired 11-11:30a ET

Aired February 10, 2022 - 11:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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UNIDENTIFIED MALE (voice-over): This is CNN breaking news.

KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan.

We begin with breaking news. Inflation in the United States soaring to the highest level in four decades. Consumer prices jumped 7.5 percent compared to a year ago, the steepest annual increase since February 1982.

This has real implications for every American and it is a number the Biden administration cannot and will not ignore today. CNN's Matt Egan is here with more on this.

Matt, what are you seeing and hearing in the latest data?

MATT EGAN, CNN BUSINESS SENIOR WRITER: Kate, inflation is hot. And it keeps getting hotter. There have been some expectations that today's report might show some signs of progress.

Unfortunately, that did not happen. And that is really disappointing for families dealing with the high cost of living, for the Federal Reserve, which is pretty slow to shift to inflation fighting mode and, of course, the White House.

So consumer prices up by 7.5 percent in January from the year before, biggest since 1982. And month over month, there had been an expectation that maybe inflation would cool off; that did not happen, as you can see, up by 0.6.

Look at the line chart. You can see inflation is going straight up. The Fed's goal is 2 percent. We're nowhere near there. Let me give you some concrete examples of what we're talking about when we talk about inflation because we saw record price spikes on a number of categories.

New cars and trucks up by more than 12 percent fro a year ago; fresh fish and seafood nearly 13 percent; restaurant meals, furniture, bedding, appliances, all of them record price gains in January. Also, gas prices keep going up. That was actually not reflected in today's report.

There's a lot of positives about today's economy: unemployment down to 4 percent; GDP last year, the fastest since 1984. But high inflation continues to loom ominously over this economic recovery.

BOLDUAN: Absolutely. Matt, thanks for laying it out. I really appreciate it.

Joining me now with more, Jared Bernstein. He's a member of the White House Council of Economic Advisers.

Jared, we've got a ton to discuss but let's talk about, let's just start here. Gas: 40 percent more expensive than a year ago; used cars: 40 percent more expensive than a year ago; food is 7.5 percent more expensive than a year ago; electricity, almost 11 percent more expensive than a year ago.

You have said this is a real problem.

Can you make a case this is getting better?

JARED BERNSTEIN, WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS: First of all, you hear there's a very big helicopter taking off behind me with a very important person in it.

We can certainly make the case that as you just reported, this is a challenge that is first and foremost in our sights at the White House. The president has two top economic priorities: one is to make sure we have the fastest growing economy, the tightest job market, offering great opportunities for any comers who want to come into this job market.

The second is to do all we can to ameliorate these price pressures. Now there is some light under the hood. It's not quite as grim as your reporting suggests. So for example, auto prices, which make about a quarter of headline inflation over the past year, they did moderate a bit in January.

As you mentioned, gas prices were down a bit but that's a very volatile number. It will jump around from month to month.

Real wages over the month from December to January, real wages were actually slightly up. They actually beat inflation. But look, we have to continue to do all we can to unsnarl supply chains at the ports, to make sure goods get from ship to shelf with great speed. And that involves our trucking agenda.

And to make sure that, over the longer term, we are expanding the economy's productive capacity with the CHIPS Act, $50 billion invested in domestic semiconductor capacity.

BOLDUAN: But this isn't good news what came out today.

BERNSTEIN: Sorry?

BOLDUAN: This is not good news, though, that came out today.

BERNSTEIN: No, this -- look, anytime you have inflation this elevated, that's even beating expectations, it's an absolute challenge for American households. But we also have to look at the bigger picture.

What are we doing to help, is it helping?

So at the ports, we know that the time that containers are spending at the ports is down significantly over the past few months. We know that shelves are stocked only 2 percentage points below where they were before this pandemic.

We know that our competition agenda is out there, helping to encourage price savings to be passed along to consumers. Meat prices actually fell in this report. Again, a monthly number; I don't want to make too much out of one month.

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BERNSTEIN: But if you get under the hood, you see where some of our interventions are helping. Broad picture though, we have way more work to do. You're absolutely right.

BOLDUAN: Broad picture: do you expect inflation to remain above the 2 percent target throughout 2022?

BERNSTEIN: I expect inflation to come down significantly in 2022.

Now more to the point, that's not just my expectation; that's the expectation of every forecast I've looked at. And it's very important. Basically, what the forecast tells you is that the job market should stay tight and get even tighter, supporting wage growth while inflation decelerates, while it slows.

So virtually every forecast has inflation growing about half as fast this year as it did last year. Now half as fast still might take you above the Fed's target. But if that occurs, that's going to be a real sign that some of our interventions, some market interventions are helping to ease these price pressures.

BOLDUAN: President Biden on December 10th said he thought inflation was at its peak. The quote was, "I think it's the peak of the crisis."

It was not. And I remember very clearly our conversations over the summer, when you were talking about inflation being transitory, it was not.

Are you guys being clear-eyed enough about what's going on here? BERNSTEIN: Absolutely. I think the thing to recognize is that our team, at the insistence of the president, is focused on not just the month to month ups and downs but on the underlying trends. And there you have to appreciate the fact that --

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BOLDUAN: Yes, but I'm talking about underlying trends. The trends are not -- go ahead.

BERNSTEIN: And so that's the point. We're going to get some months come in better and some worse, probably when the president said that Omicron wasn't quite in the picture yet. So the virus is still upon the land.

We are reacting to real data just like we got here today. This data tells us that we have to continue to press on every effort we can to unsnarl supply chains, to get goods through the ports, to get the trucks moving, to make sure that our competition agenda is helping consumers to realize price savings and, longer term, to increase the economy's productive capacity by getting people into the job market with our care agenda, our prescription drugs agenda and bringing down the costs of drugs, health care, education. This is all legislation we have to press going forward.

BOLDUAN: You mentioned supply chains. The current protest in Canada, they're impacting the United States now. Two Ford engine plants in Windsor, they had to stop production yesterday because of supply chains caused by the blockade issues.

A GM plant in Michigan had to also cancel an entire shipment because of it. It's going to snowball if this continues.

What can the administration do about this supply chain issue?

BERNSTEIN: So our Customs and Border Patrol are very much engaged in this. I just got a readout this morning. They are talking to Canadian authorities. Obviously, we support peaceful protests as a key component of democracy.

But we can't have a situation where families don't get food to their table and where supplies are blocked, coming across main arteries. Now there are still some arteries open and we have to make sure they stay open.

But, yes, our administration is talking to Canadians, trying to deal with, particularly, the supply chain issues that have elevated by this event.

BOLDUAN: All right, much more to discuss especially on that. Jared, thank you for your time.

BERNSTEIN: Thank you.

BOLDUAN: Thank you. We're also following another breaking story. Prince Charles is isolating right now after testing positive again for coronavirus. This is his second time with the virus. Part of the concern right now, a source tells CNN that the prince was recently with his mother, the queen.

CNN's royal correspondent Max Foster is joining me live with the breaking details.

What are you hearing?

Has the queen been tested?

MAX FOSTER, CNN LONDON CORRESPONDENT: Well, they're not telling us, not confirming to us whether or not she has been tested. You would have thought that was the first thing they would do after they realized that Prince Charles had met her this week and then later tested positive.

We have to read between the lines often on these statements. They don't want to give a running commentary. But what they have said is that they did meet; she doesn't have symptoms and they are monitoring her closely, as you would expect.

So I don't think we're going to hear anything more about the queen unless there is some update. Particularly as a medical matter they're always quite (INAUDIBLE) medical matters. And basically, scaring people into thinking it's more serious than it is.

Meanwhile, Prince Charles, as you say, he is isolating this morning. A tweet this morning going out, saying the Prince of Wales tested positive for COVID-19, self-isolating. His Royal Highness is deeply disappointed not to be able to attend today's events in Winchester.

Those events he was due to go were all canceled. But he was out last night with senior government ministers and presumably they're being tested as well. So not too much to concern ourselves about yet. But it is something we do have to watch very closely.

BOLDUAN: Absolutely. Max, thank you so much for the update. I really appreciate it.

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BOLDUAN: Coming up for us, federal law enforcement with a new warning about those truckers protests I was discussing with Jared Bernstein. Why they're now concerned about Sunday's Super Bowl. We'll be right back.

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BOLDUAN: Developing this morning, the Department of Homeland Security is warning that the trucker protest that we're seeing in Canada could be coming to America. The particular focus right now on the Super Bowl this weekend. CNN's Camila Bernal is in Los Angeles with the very latest on this.

Camila, what are you learning about this?

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CAMILA BERNAL, CNN CORRESPONDENT: Just imagine Los Angeles traffic on Super Bowl weekend. And then you add in a convoy of truckers protesting. It really could be a headache.

And DHS said it's not necessarily about violence but they are worrying about other things, putting out this bulletin that in part says there's a potential to severely disrupt transportation, federal government operations, commercial facilities, emergency services.

And that's because of the gridlock and also potential counter- protests. So we know that this is in part because of vaccine mandates. So you're likely going to see very passionate people on both sides of this issue here.

And so that's where you see the potential escalating for possible disruptions here. But they do say that they have about 500 DHS employees here, in addition to Inglewood police, LAPD, the Sheriff's Department and they say they have it under control.

But this likely will end up extending because they say they'll end up in Washington, D.C., in March 1st for the State of the Union address -- Kate.

BOLDUAN: Camila, thank you very much.

Let's go to Canada now where these protests began and are ongoing. They show no signs of letting up. CNN's Paula Newton is live in Ottawa.

What are you seeing?

PAULA NEWTON, CNN ANCHOR AND CORRESPONDENT: The protest continues much as it has for almost two weeks. Behind me, that is Canada's parliament and they have started their rally again today. They're getting ready for lunch.

That should tell you how they are set to be staying here for as long as, they say, it takes to in fact get rid of the COVID-19 mask mandates. The City of Ottawa is stepping up enforcement at one of the border crossings to no effect.

If you come with me, this is a business district that's completely shut down. They've had to shut down for security reasons, very little going on. But this is also what I want you to see, Kate, with what some of the residents are dealing with here.

Take a look all the way down the street here. It has been like that now for nearly two weeks. Those truckers are parked there. They say they have everything that they need in their trucks in order to stay day after day, week after week, as long as it takes -- Kate.

BOLDUAN: So unbelievable to see that in downtown Ottawa. Really appreciate it, Paula.

Protesters are also significantly impacting the busiest border crossing between Canada and the United States. CNN's Miguel Marquez is in Windsor with more on that.

Miguel, what are you seeing?

MIGUEL MARQUEZ, CNN SENIOR NATIONAL CORRESPONDENT: Yes, the Ambassador Bridge, which had been opened, trickled basically from Canada into the U.S., is now completely shut. Protesters moved into the one lane where they were able to get into the U.S.

This area here is the roadway that should be choked with traffic going into the U.S. and, on this side, you have traffic that should be coming from the U.S. into Canada, the bridge behind it completely shut down.

There are maybe 75 to 100 vehicles out here. And as the day goes on, more protesters show up to show their support. It is having an impact. We're moving into day four now. Ford, GM, Toyota, Honda, Chrysler, Fiat, from Toronto to Lansing, Michigan, they are either reduce shifts or shutting down until the protest is over.

The governor of Michigan now asking the government of Canada to end this protest and get that bridge back open -- back to you.

BOLDUAN: How you get that done is the very big question right now.

Joining me -- thank you so much. Great to see you, Miguel.

For more on this is the mayor of Windsor, Ontario, Drew Dilkens.

Mayor, thank you for being here. You said yesterday that every hour this protest continues, your community hurts.

What has been the real impact on your city to this point?

MAYOR DREW DILKENS, WINDSOR, ONTARIO: Well, it's the city and our national economy, Kate. The impact of this border closure, for perspective, we're talking 8,000 to 10,000 trucks a day that use this border crossing. It is the busiest border crossing between our two countries.

And in terms of dollars and cents, we're talking about $400 million per day that crosses this location. And so people know Detroit as the auto capital of the U.S. Well, in Windsor, we're the auto capital of Canada.

And the supply chain on both sides of the border has been built up and is tightly integrated. And when the border is closed, there is an immediate reaction because of just in time delivery schedules. There is an immediate reaction at plants on both sides of the border.

BOLDUAN: It seems a standstill. You've been working toward a peaceful resolution to try to get traffic flowing again.

Who is involved in these -- I don't know if you call them negotiations or conversations.

What's happening on that front as of right now?

DILKENS: Yes, it's very frustrating because people just want us to go in and flush everyone out. And there's a real threat of violence here.

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DILKENS: We've seen protesters come out with tire irons, when the police attempted to tow a car. It could escalate very, very quickly. And you have people on the ground so committed to this protest that they have expressed themselves and said that they're willing to die for this particular protest.

So that amps up the temperature on the ground in a different way that requires a different police response. And at the same time, going in and moving out 100-200 protesters, well, we could probably do that.

What we don't want to see is have 300 more show up tomorrow to replace the ones that were moved out. So police are trying to negotiate. It is a, I would call them a leaderless group and, frankly, the requests these folks have, they are not unified.

There are folks here protesting government, like you would see at a G7 or G20 protest. There are folks that are protesting climate change initiatives and some are protesting vaccine mandates.

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BOLDUAN: Which kind of leads to the key question of, how do you end this if there's no one you're negotiating with?

Everyone has a different demand and there is, as you say, a real threat of violence.

How does this end?

DILKENS: I can tell you that the hallmark of democracy in the United States or Canada is the ability to protest, the ability to express yourself. That's OK.

What's not OK is to choke off and have an illegal blockade at the busiest international commercial border crossing between our two countries. So if there's no desire or willingness by these protesters to leave, then they need to be removed.

And the temperature is ramping up, not just on the protest site but on the auto site, on the agriculture community and everyone else who has a hand in having a smooth and efficient border crossing for their economic prosperity.

So things will have to happen very quickly. We cannot handle many more hours of a shutdown. The economies of both of our countries cannot handle this type of impact.

BOLDUAN: A lot of people have made the point that this is a minority view; 80 percent of Canadians are fully vaccinated. Really, statistics just showing this is a minority of the population.

A lot of people saying, the majority of Canadians are not with these protesters.

With that in mind, are you reaching a point, where you don't -- no one wants violence but that you think they will need to be forcibly removed in some way, shape or form?

DILKENS: Well, listen, we have called in and requested additional police support from the Ontario Provincial Police. They have started to arrive now. We've requested other support from other police services.

Those officers are coming into town as we speak. And if the protesters don't leave, there will have to be a path forward. If that means physically removing them, then we're prepared to do that.

BOLDUAN: Mayor, thank you very much for your time.

DILKENS: Thanks, Kate.

BOLDUAN: Coming up for us, Congress is now investigating Donald Trump's handling of White House records as a new book reveals White House residents staff even found wads of printed paper clogging a toilet. The latest bizarre details on Donald Trump's White House records -- next.

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BOLDUAN: Now to this: the House Oversight Committee launched an investigation into whether Donald Trump violated the Presidential Records Act after the National Archives retrieved 15 boxes of White House records from Mar-a-lago.

"The New York Times" reports that some of the records could contain classified information. The National Archives is also asking the Justice Department to step in and investigate all of this.

Joining me right now is CNN legal analyst and former federal prosecutor, Jennifer Rodgers.

First off, the National Archive is asking DOJ to investigate his handling of records.

Do you think they will? JENNIFER RODGERS, CNN LEGAL ANALYST: Well, Kate, I think that they will. But I think first, they're going to ask the inspector general of the National Archives to take a look. That's how it usually works. The IG will work up an investigation and a report and make a criminal referral if they find conduct they think is criminal.

If that happens and a criminal referral comes to DOJ, I think they will look at it because DOJ takes these inspector general referrals very seriously. But I think we're a couple of steps removed from that right now.

BOLDUAN: What are the possible violations of law here?

And how challenging is it to prove?

RODGERS: There's three possible violations. One is the Presidential Records Act, as you mentioned. The problem with that is, while it's unlawful conduct to violate the act by mishandling official documents the way president Trump is alleged to have done, there's no enforcement mechanism.

While it's unlawful, there's no criminal statute that says you can get X amount of months in prison or a Y fine. That's the problem, is there's nowhere to go for DOJ to go on that.

Then there's the possibility of obstruction of justice. If records were mishandled with the specific intent that it is to undercut an investigation or a potential investigation, that would be obstruction of justice. But that's a big if, of course. That requires a lot of facts we don't know yet and I expect DOJ may get to that.

But it'll likely be in the context of a broader investigation into the former president surrounding the attempt to overturn the election.

And finally, there's the classified information issue. Of course, classified information mishandling is a crime. DOJ takes that very seriously.