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At This Hour

Expected Historic Rate Raise by the Fed; Biden Calls on U.S. Oil Refiners; Economic Anxiety; January 6 Committee Asks for Info on Capitol Tour Pre-Siege. Aired 11-11:30a ET

Aired June 15, 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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ERICA HILL, CNN ANCHOR: Hello, everyone. I'm Erica Hill in for Kate Bolduan.

The Federal Reserve poised to make a big move to ease inflation, 100 million Americans gripped by a dangerous heat wave and COVID vaccines for the youngest kids could be days away. That's what we're watching AT THIS HOUR.

We begin with the Federal Reserve on the verge of making its biggest interest rate hike in nearly three decades. All, of course, in an effort to slow soaring inflation. In hours, the Fed expected to announce it's raising rates by 0.75 points. That will make it more expensive to borrow money, to pay for things like a mortgage.

The Biden administration is under growing pressure to do more to avoid a recession. Retail sales fell 0.3 percent last month. Consumers feeling the squeeze from the record high gas prices, inflation and already rising interest rates.

Let's begin our coverage with CNN's Matt Egan, live in Washington, taking a closer look at the Fed's big move expected today -- Matt.

MATT EGAN, CNN BUSINESS SENIOR WRITER: Erica, this is shaping up to be an historic day for the American economy. In just under three hours, the Federal Reserve is expected to take aggressive action to try to tame inflation.

Prices are surging so rapidly that economists and investors now expect the Fed to raise interest rates by 0.75 percent. This is a big deal. Some context: just six months ago or so, there was a debate over whether or not the Fed would raise interest rates by that much all year. Now they're doing it in a single meeting. We haven't seen anything like that since 1994.

And for families, this means higher borrowing costs on mortgages and credit cards and car loans. The COVID era of free money is over in a big way. Now we should note this was not the way that Jerome Powell and the Federal Reserve wanted this to play out. They preferred to raise interest rates gradually, which is what they did in 2015 and 2016. We have a chart on this, where interest rates went up very gradually.

They were sort of gently slowing the economy. But they don't have that luxury this time because inflation is so high that they really have to aggressively move interest rates higher.

And that line on the right is going to go significantly higher today. That means higher borrowing costs. The Fed is late to inflation, Erica. The Fed realizes it. They can catch up. No one should doubt they can catch up but the tricky part is catching up without causing a recession.

HILL: Yes. That is the delicate balance. We'll see how that works out as we continue to follow it. Matt, thank you.

President Biden says fighting inflation is his number one domestic priority. This morning, we learned the president sent a letter to major oil refineries, calling on them to increase supplies. CNN's John Harwood is live at the White House with more.

What does the president want these companies to do?

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: What he wants them to do is give him some assistance with what, as you indicated, Erica, is the top priority. The top priority as a matter of politics.

As Matt Egan was just indicating, the principal responsibility for controlling inflation now rests with the Federal Reserve. But the President of the United States is the face of the American government. That means pressure from the public about inflation is being directed to Joe Biden.

And he's trying to respond to that pressure. There's only limited things he can do, particularly on gas prices. Those oil prices are set on a global market. But one thing he can do is try to override some of the concerns about human rights and go meet with the Saudi leadership, which he's going to do in a few weeks.

And another thing he can do is ask oil companies, oil drillers and oil refiners to increase supply to reduce prices. He's written that letter. You can see the list of these companies on the screen. They include ExxonMobil, Chevron, BP and Shell.

And what he's saying is, please, take whatever actions you can to increase supply with the suggestion that maybe the government would take some action later. Here's Jennifer Granholm, the Energy Secretary, this morning on "NEW DAY."

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JENNIFER GRANHOLM, U.S. SECRETARY OF ENERGY: I'm just saying that no tool has been taken off the table and he wants to hear from the refineries, the companies who are doing refining, to see what is the bottleneck and how we can increase supply.

And he's also asking, of course, for the oil and gas industry to increase supply as well by drilling more. They are about 100 rigs shy of what they were before COVID. They need to increase supply.

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HARWOOD: So no option taken off the table.

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HARWOOD: But that also means no action has been taken yet by the president. He'll see what response he gets from the oil companies and see whether pressures otherwise get reduced on oil and gas prices. Right now, there's no sign of that, particularly as we enter the summer driving season, Erica.

HILL: John Harwood with the latest from the White House. Thank you.

Every American is feeling the impact of these record-high gas prices. You don't need to drive to feel it. AAA reporting the national average of regular gas is now $5.01 a gallon and in seven states it's higher, topping $5.50 a gallon.

Gabe Cohen is live in Las Vegas, where prices have skyrocketed.

That may be putting it mildly at this point, Gabe.

GABE COHEN, CNN CORRESPONDENT: Erica, that's right; $5.75 at this Las Vegas station and, look, drivers across the country could be seeing prices like this in the weeks ahead. That national average gas price is now $5.01 a gallon, up $1.93 in the past year.

These gas prices are hitting workers with lower incomes even harder. Just take Nevada. The state has the second highest average gas price. But workers here in many cases make lower salaries, certainly lower than California, the state with the highest average gas price.

And so if you look at the data, the average worker here has to work the longest amount of time, three hours on average, in order to afford to fill their tank. Now AAA surveyed drivers earlier this year. Many of them said 70-75 percent of drivers said at this type of price point, $5 a gallon, $5.50 a gallon, they would change driving habits.

But at this point demand for gas hasn't slowed down. What we are hearing from drivers is that they're cutting other expenses or just working more hours. Just take what this Las Vegas woman told us.

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ELSA ROLDAN, LAS VEGAS RESIDENT: I need to cut so many expenses. I don't go to movies anymore. I don't do many other things. It's just work and live to work.

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COHEN: And, unfortunately, drivers like Elsa likely won't see relief until at least July. And then, Erica, experts think we could hit $6 a gallon nationally by late summer.

HILL: $6 a gallon nationally, that is rough to hear. Gabe, appreciate it, thank you.

Joining me now, Heather Boushey, a member of the White House Council of Economic Advisers.

It's good to have you with us this morning. As we look at where things stand, we know how painful it is for so many Americans across the country. There's a searing headline this morning in "The Washington Post" that reads, "Markets and households lose faith that Fed can handle inflation."

Do you think the president has faith that the Fed can handle inflation?

HEATHER BOUSHEY, WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS: Certainly. The president believes in the Fed and the Fed is the first line of defense against rising prices.

But the president continues to do everything in his power and to call on Congress to do everything in their power to help families in this hour of need.

As families are struggling with high prices at the pump and other things, in large part, at this point, due to Putin's unprovoked war in Ukraine.

But the president's made very clear that he respects the independence of the Fed, while he is taking action himself, as he did today by reaching out to oil companies nationwide to ask them to do their part to bring refinery capacity online, to help families cope with the prices at the pump.

HILL: Let's talk specifically about the letter. To your point, the president asking them to bring more refineries online to increase supply on the production there.

What's the incentive for these companies?

I mean, at the same time, there is a push in this country away from gas-powered vehicles.

BOUSHEY: Certainly. What we have seen is that Putin's unprovoked war in Ukraine has disrupted global oil markets. It's disrupted supply. The United States and other countries refused to buy this oil that is now tainted by the war. And that's led to higher prices here and globally..

But one of the things we've seen is that even though this is a core reason that prices have gone up at the pump for families, it's actually the case that there's this unprecedented gap between the amount of money that refiners are paying for the crude oil that they're getting in from the global markets and what they are then charging for the oil to turn into gasoline and go to the pump.

Their profit margin since the beginning of the year are up by three times, that's unprecedented. And there's a growing gap between that crude oil price and gas prices. HILL: Right, so that's something --

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BOUSHEY: -- the core thing the president wants to address today.

HILL: -- understandably but we've been down that road. We've been down that road.

So the president now saying, hey, let's work together.

But again, I'm just curious, what is the incentive for these oil companies?

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HILL: When, if they're looking down the line, right, and saying, in a number of years in the not too distant future, more cars may be hybrids or plug-in electric.

Is there an incentive for those companies today?

BOUSHEY: Well, this is the thing. We are stuck in this moment where we continue to be reliant on global oil and on the prices. And we need to do everything we can to make sure that consumers can get the needed energy.

And the president has also made clear his commitment to help businesses, firms and families make it through this transition. That was a core part of the president's agenda that he put forward to Congress, that is still sitting there, waiting for action to help reduce prices that families pay for energy.

But let's remember, the president also took steps last week to help smooth that transition to clean energy, taking historic steps with the Defense Production Act to help make it possible for producers to ramp up production in solar and heat pumps and the like.

But he's also recognized that we have to solve these problems in the here and now. And that's back to these refiners to do their part.

HILL: Let's talk about the here and now. These are a little bit rapid-fire because we're getting tight on time. Give me a timeframe. Let's say more refineries were brought online, the supply was increased. Give me a specific.

When and by how much will American consumers start to see a difference at the pump?

BOUSHEY: Well, certainly, when you see these rising profit margins, there is latitude for those refiners to make different choices. But we also know that, in the year before the president took office, 800,000 barrels of oil capacity was taken offline. So they could re-up that. And that could very quickly help increase supply and help address the crisis.

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HILL: What does fairly quickly mean, though?

I think a lot of Americans at home, myself included, every time I fill up my car, give me a specific.

What does fairly quickly mean?

Are we talking about weeks or months?

BOUSHEY: Well, I think it all depends on the kinds of conversations that the president will have with these refiners.

And do they need both carrots and sticks?

Some of this, Congress could take serious steps to lower other kinds of costs families are facing, prescription drugs and health care and child care. There are a lot of steps we can take to help families in the here and now.

HILL: One last question. A yes or no. The White House, this morning, Secretary Granholm was on "NEW DAY" with John Berman and was asked specifically about whether or not there could be taxes on these oil companies.

And she said that nothing is off the table here.

So I'm just curious, is the push here for the oil companies, that they either need to boost their supply or that the president, the White House, the government is going to hit their bottom line?

BOUSHEY: The president made very clear in his letter that he will use the full powers at his disposal and he wants to start this conversation now.

HILL: Heather Boushey, I appreciate you joining us. Thank you.

Christine Romans with us now.

You follow all of this so closely. Not just our viewers but colleagues as well, we come to you for information on cutting through all the government talk here. What we heard from Heather Boushey is what we heard the last few months from the Biden administration, pinning this on Putin and Ukraine --

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CHRISTINE ROMANS, CNN ANCHOR: -- companies. The new angle is the greedy companies --

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HILL: -- the Putin part is part of it.

What about this letter?

What is this actually going to do?

I don't feel like we're getting a lot of answers.

ROMANS: The inflation fighter here is the Fed. The White House is trying to show that it is on the case, that it understands that Americans' purchasing power is going down and this is the number one topic of conversation.

They see these record profits for oil companies. And they understand the optics are just terrible. So they're trying to work with the industry to move forward here. But you're absolutely right to talk about the transition to energy because we have to do both at the same time.

We have to focus on getting supply right now, supply of something that we want to move away from in the future. So the incentive for energy companies to be adding refining capacity and drilling more when you know that, 20 years down the road, this is not going to be a priority, that's kind of a hard sell for the investors behind those.

HILL: That's the delicate dance. It may the right thing for the American consumer, it's not in their best business interest.

So based on your conversations, right, with folks in the finance industry, on Wall Street, is there a sense that there is another incentive here, something else the administration can do, to try to get those oil companies on board, to help bring prices down?

ROMANS: -- the threat of a windfall tax, which might not even pass a divided Senate but unclear what the administration could do on its own. But at some point, high prices cure high prices. The prices get so high that these drillers and refiners, they want to get, they want to make more money from the higher prices.

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ROMANS: Sometimes the high prices actually start to cool demand, also start to incentivize more production.

HILL: We'll be watching it. Nice to see you.

The January 6th committee asking a Republican Congress man for more information about this tour group, which he led into the Capitol complex on the eve of the insurrection. More on that new video and details next.

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HILL: Developing at this hour, the House committee investigating January 6th was asking again a Republican Congress man for more information about a tour he led with 10 people the day before the insurrection. [11:20:00]

HILL: Releasing this surveillance video a short time ago, showing individuals photographing stairwells and security checkpoints and hallways and areas of the Capitol complex, according to chairman Bennie Thompson, not typically of interest to tourists.

CNN's Ryan Nobles is on Capitol Hill with these new developments.

This is not the first time they've asked for some information from the representative.

Will it go forward?

RYAN NOBLES, CNN CORRESPONDENT: Doesn't seem like it, he's been resistant to cooperate on any level and has been pretty vigorous in his defense that there was nothing suspicious about this tour.

But what the committee is doing for the first time is displaying evidence as to why they want answers to exactly what was his role was in connection with this individual, who they have on surveillance video, taking pictures of areas of the Capitol that normal tourgoers wouldn't be interested in.

These are hallways, tunnels, security checkpoints leading directly into the Capitol complex. And also interesting about this individual is the committee is in possession of video of him marching to the Capitol on January 6th, where he specifically called out members of Congress, including the House Speaker. Nancy Pelosi.

He brandishes a flag with a tip that has a pointed spear attached to it and makes, essentially, threatening claims against members of Congress.

So those two things combined are a part of why the committee wants more information about Loudermilk and his relationship with him. Now it's important to point out, this individual did come and speak to the January 6th committee. So they have interviewed him.

And also, this individual has not been accused of any crimes. He's not been charged with anything. There's nothing specifically that implicates him in a crime. But of course, this comes against the backdrop of Democratic members of Congress, accusing Republican members of Congress of giving what they describe as reconnaissance tours in the days leading up to January 6th.

This is part of what chairman Bennie Thompson said in the letter to Loudermilk, quote, "Individuals on the tour photographed and recorded areas of the complex not typically of interest to tourists, including hallways, staircases and security checkpoints."

The other interesting aspect of all of this, Erica, the Capitol Police sent a letter to Rodney Davis, the chairman of the administration committee, earlier this week, where they said they had reviewed the videotape and found nothing suspicious about this Loudermilk tour. So quite a bit of back and forth here between the two sides involved in this particular issue.

HILL: A lot of back and forth. One quick question before we drill down a little bit more.

This person identified who was identified, interviewed with the committee, did this person actually enter the Capitol complex on January 6th?

Do we know for sure?

NOBLES: Yes, so there's no evidence of that. Certainly no evidence he entered the Capitol. Congressman Loudermilk said that everyone involved in that tour from his perspective never entered the Capitol on January 6th. But we have no evidence to dispute that claim at this point.

HILL: Ryan, stay with us. I want to bring in CNN legal analyst, Elliot Williams, a former deputy assistant attorney general.

Elliot, as Ryan pointed out, on Monday, the Capitol Police released this letter and said they do not consider any of the activities we observed as suspicious, noting in that same letter, they train officers on being alert for people conducting surveillance or reconnaissance.

That letter comes Monday. This morning, 48 hours later, this video and letter is released from Bennie Thompson.

What do you make of this push by the committee?

ELLIOT WILLIAMS, FORMER FEDERAL PROSECUTOR: Look, Erica, this might be evidence of a really serious violent crime or a crime against the United States or it might be a video of citizens taking a walk through the Capitol as tourists do all the time.

I used to see people taking pictures all the time. Three people can answer that question. Representative Loudermilk and then the individual taking photographs and the head of the Capitol Police. All need to come in.

And I think and frankly hope the committee has evidence they're willing to put on tomorrow to help clear this up. There's always factual disputes in investigations and prosecutions. And you clear them up. And the way to do it here is get the folks and see what they have to say.

But of course, I don't want to minimize what this looks like. It looks suspicious but people do get tours all the time. It's just hard to tell just from snippets of video.

HILL: Ryan, give us a sense, too, for those who don't work in the Capitol complex. This is your office, Ryan Nobles. You were around these halls. You know this area so well. The specific areas where the tour was being led, so chairman Thompson said taking pictures of things and in areas that are not typically of interest to tourists.

But they were there.

Was there anywhere we know of in terms of where this group was that was breached on January 6th?

Or was an alternate exit or entry point, were any of those areas raising suspicion?

NOBLES: From what I can tell in the video --

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NOBLES: -- and actually my colleague, Daniella Diaz, went to those spots to take pictures, to compare them to what he would have been taking pictures of.

And what's interesting about it is there are pictures of what would be a security stanchion (ph), where Capitol Police officers would be stationed, in an area that leads into the Capitol building.

There's another section where he's clearly taking a picture of a tunnel, which is a subway that leads between the Rayburn House Office Building and where I'm standing in the Capitol. That is a direct entrance into the Capitol.

How that marries with what happened on January 6th, there wasn't a ton of people moving from the House office buildings into the Capitol. That's not the way the riot kind of commenced. They actually stormed the Capitol itself. They didn't need to come in from the tunnels from the House office buildings that are adjacent.

But clearly, the pictures that this individual seems to be taking don't seem to be of what you would describe of something a tourist would be interested in looking at later on. Now obviously, different people come for different reasons to see different things. So it's hard to get into the mind of the individual. . But that's got to be why the committee brought him in to have a conversation with him. But the other point I need to make that's important about all of this, Erica, people weren't getting tours at this time. This was the height of COVID. It was pre-vaccine.

The idea that you're even in the complex on that day, that alone has got to be a part of the concern here for the committee as they as they investigate this.

HILL: Tomorrow's hearing, we're told, is going to focus on the pressure campaign on Mike Pence for him to stand in the way of the election being certified. As we know, how effective, Elliot, will it be to hear about Mike Pence, if we didn't hear -- if we don't, rather, hear directly from the former vice president?

WILLIAMS: Oh, but the people that we're likely to hear from were in the room where it happened.

We're likely to hear from Marc Short and his legal counsel, Greg Jacob. These people would have been privy to meetings he attended and conversations he had and can help fill in the gaps.

And notably, Erica, yesterday the committee released a pretty explosive video talking about John Eastman, an individual who a federal court has already said is likely to have committed a crime in the form of obstructing Congress in concert with the president and that's all part of this ongoing plot, the pressure that Mike Pence was a part of.

I don't think you necessarily need to hear from Mike Pence, given the wattage of the folks who are testifying around him, who, frankly, you're probably going to get far more useful testimony out of anyway.

HILL: Quickly before we let you go, Ryan, a lot of back and forth after we saw these public disagreements or contradictions, shall we say, between members of the committee, specifically about whether there would be criminal charges referred to the DOJ, a referral there.

Adam Schiff pushing back on that, saying these aren't disagreements, we just haven't talked about it.

What are you hearing behind the scenes of the committee?

NOBLES: I think the committee is in a place where they want to hold someone accountable. And they're trying to figure out the best path toward that level of accountability.

And the question that they're wrestling with is, is it valuable for them to present the evidence as they have it and then let the Department of Justice decide for themselves?

Or do they need to give the Department of Justice a nudge to say, we think this is a crime, you need to investigate it and do that in some sort of a formal sense?

And that's the back and forth you see playing out in real time and in public by the committee. Some members, chairman Bennie Thompson told me initially he thought they didn't need to offer the nudge. And they obviously pushed back, saying it's part of the deliberations. But definitely something the committee is wrestling with. Erica.

HILL: Thank you, gentlemen, good to see you this morning.

Coming up, the Justice Department announcing federal hate crimes charges against the man accused of carrying out a racist massacre in Buffalo. New developments in that case next.

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