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At This Hour

Biden Hosts Macron at White House; Inflation Cools in October as Consumer Spending Increases; Dow Falls as Investors Await Friday's Jobs Report. Aired 11-11:30a ET

Aired December 01, 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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KATE BOLDUAN, CNN ANCHOR (voice-over): Hello, everyone. AT THIS HOUR a state visit at the White House. A critical ally at a critical time at a press conference, happening just minutes from now.

Plus, inflation is cooling and the chair of the Federal Reserve is sending a big signal. We will dive into that.

And targeted or not. That is now a central question in the murder investigation at the University of Idaho. This is what we're watching AT THIS HOUR.

Thank you for being here. I am Kate Bolduan. The action is at the White House this hour. President Biden and French President Emmanuel Macron will be in a joint news conference really, just minutes from now. The two men have just wrapped up their meeting in the Oval Office. There is a lot for them to talk about.

Of course, Ukraine, Vladimir Putin and China among the very central issues before them. A lot to agree on. But there is also some real tension between the allies over issues like trade. Macron's trip is the first state visit of the Biden administration. Tonight, the first family will be hosting the French leader at a formal state dinner.

Phil Mattingly is live at the White House.

A lot is going to be happening today so what -- do we know yet what they discussed in the Oval Office?

And also will we hear from them in this press conference?

PHIL MATTINGLY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That bilateral meeting is underway. Now we have the spray with the leaders. Our colleague was in the room. The president did not take questions. There will be a press conference in just a short while but there are no shortage of issues for the two leaders to discuss.

This morning was certainly rich with symbolism, pomp and circumstance. Tonight will be very much the same, a glittering state dinner, the first of President Biden's time in office. This bilateral meeting behind closed doors is where very real, very significant substance will be discussed, much of it extraordinarily consequential, not just from a bilateral sense but also on a geopolitical sense.

The two allies, two very long-standing allies, two leaders who have spoken quite often over the course of the last 1.5-2 years since President Biden has been in office are central in the West's response to Russia's invasion of Ukraine.

They are central to how President Biden is attempting to move the West in his direction when it comes to addressing China. Also very real issues as you noted, on the economic side of things. Macron has been very clear about his distaste and outright anger to some degree with some of the protectionist, as he calls them, policies President Biden has put in place.

Over the top of all of that, sits the critical nature of the alliance. As president Biden laid out this morning.

(BEGIN VIDEO CLIP)

JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: President Macron heard me speak before about the inflection point, we stand at in history.

BOLDUAN (voice-over): Let us jump in right now and listen to the President in the Oval Office with Emmanuel Macron.

(END VIDEO CLIP)

BIDEN: His second visit and we always (INAUDIBLE) as we said today in our short remarks, France and the United States have always stood together. And I can say that President Macron and I have stood together since we've worked together in the G7 meetings, the G20. And we -- France is an incredibly, incredibly valued ally.

And I know it sounds like hyperbole but from -- from the Revolutionary War to the world wars to today, we're -- we've been locked at the hip in what we've been doing.

And our efforts are continuing at NATO, the G7, the G20. And there's a lot -- a lot going on.

As I constantly am probably boring Emmanuel with, we are at a real inflection point. Things are changing rapidly -- really rapidly.

And it's really important that we stay in close communication. It doesn't mean that every single, solitary thing we agree on. But it does mean that we agree on almost everything.

And we're working together to strengthen the security and prosperity across the Atlantic and in each of our countries but also Europe as a whole.

Emmanuel is not just the leader of France; he's one of the leaders of Europe. He's been very outspoken and he has been very, very commanding in Europe.

And this morning, we're going to discuss our cooperation on all the issues.

[11:05:00]

BIDEN: From high-tech commerce to defense to cyber to space, to a whole range of issues that are on both of our agendas.

Mr. President, I look forward to our conversation today. I know you've had some good conversations already with some of our senior administration officials. And I look forward to today. The floor is yours, sir.

EMMANUEL MACRON, PRESIDENT OF FRANCE: Thank you. Thank you, Mr. President, dear Joe.

Let me first say that I'm extremely happy and honored to be here for the first state visit of your administration. And this is, for me, the best evidence of this, indeed, very long-term friendship and partnership. And this is exactly the basis of -- of our relation.

We will discuss about a lot of topics but obviously, we -- we are together in challenging times globally and with the war in Ukraine launched by Russia. And so, obviously, it will be the first topic of discussion for both of us.

And since the very beginning of this war, we worked very hard together in order to help Ukraine to resist and to be resilient and we will reinforce this -- this action.

But what we want to do as well -- and I want really to pay tribute to a lot of statements you made -- we want to build peace.

And sustainable peace means full respect of sovereignty and territorial integrity of Ukraine but at the same time, a new architecture to be sure that we have a sustainable peace on the long run. And we are very much committed on -- on the -- on this issue.

We will discuss about, as well, energy, economy, space, nuclear. And I spoke about this: we're in synchronization. And I think this is extremely important, precisely, to have close coordination between us on these different issues. Because we want to fix the direct and indirect consequences of the war on our economies and our people.

But at the same time, we want to prepare for future generations a carbon-neutral economy, creating a lot of jobs, which means investing a lot in our economies. And we have to synchronize our action on this issue. And it will be an important topic of discussion.

Beyond that, we will discuss climate change and biodiversity and the common actions in the -- in this field, health and a lot of global topics where our alliance is so critical.

But let me, once again, thank you -- thank you and your wife for the wonderful dinner we had yesterday, for the friendship and, really, for the quality of the discussion we have together and the common actions and the common decisions we take in these so difficult times. Because I think when we look at our common history, this friendship always prevailed -- with quite good results, by the way.

BIDEN: Yes.

MACRON: So it will prevail.

BIDEN: Folks, we'll --

(CROSSTALK)

BIDEN: You know we are going to do a press conference, so we'll answer your questions at the press conference. And that's going to be shortly. And I don't know how shortly -- but shortly, OK?

(CROSSTALK)

BOLDUAN: We're hearing there some of the interaction in the Oval Office between the two leaders. We're going to hear more from them at a press conference very soon. Phil Mattingly, I think is still with me at the White House as they listen to the statement together.

Phil, the overarching message that both wanted to convey, of course, as you were just getting our perfectly, which is, as Biden put it, we've stood together since we have worked together.

But also both laying out there is a lot of agenda items that they both want to hit on, not all of which they agree on.

MATTINGLY: Yes, significant and consequential. Really two comments, one from each leader that I wanted to pull out and focus on. The president talked about how President macron is not just the leader of France, he's a leader in Europe. That really gets at the underlying rationale for why this is the first state visit, why President Macron and France were selected for this incredibly important and symbolic invitation from the White House.

Europe right now is as important in terms of a relationship perspective as it has ever been in the first major land war since World War II. obviously, all of the countries dealing with economics, dealing with national security, dealing with major significant issues.

President Biden is of course a long time transatlanticist. He is focused on the long-term alliances that the U.S. has always held and those alliances right now are in a very uncomfortable place -- was probably an understatement, to say the least.

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MATTINGLY: At a time when traditional U.S. allies, while they still maintain them, while they are still very consistent, are facing their own domestic issues at a point where whether you look at the U.K., you are looking at Germany, countries within the E.U., France and President Macron, even as he faces his own domestic issues, is certainly a leading if not the leading voice. He is a veteran leader within that bloc. That is why he has become so invaluable. That is why the relationship, despite tensions from very early on in the administration to now, on an overarching basis, is so critical.

The other, which really gets at one of those tensions that continues to exist is where President Macron was saying not just about how they need to remain aligned on Ukraine but also afterwards particularly as it pertains to the European economy, saying that they need to synchronize things when it comes to how they invest, how they create jobs.

That is a not-so-subtle hint at the problems that he has been very clear about when it comes to the subsidies that the U.S. has put into place through one of President Biden's cornerstone pieces of legislation related to electric vehicles.

It has been a major concern and one of the top agenda items at least in terms of areas where they very much so diverge. President Macron and his top aides, officials have said he is going to bring up during this trip.

BOLDUAN: Also can be a nod to how France was caught off guard with some of the moves that the president has announced when it comes to the submarine deal with Australia. There is a lot there in that little word of synchronization and also sustainable peace.

Stick with me. Also joining the conversation CNN NEWSROOM senior political correspondent, host of "INSIDE POLITICS SUNDAY," Abby Phillip, and CNN political and national security analyst David Sanger. He is a White House national security correspondent for "The New York Times."

Abby, your thoughts on what we heard from the Oval Office, from the president, from President Biden upon Macron arriving but also more broadly when it comes to state visits.

They happen to show friendship and unity, but they also always want to get something out of it.

What do each of these leaders need from each other right now?

ABBY PHILLIP, CNN SENIOR POLITICAL CORRESPONDENT: Yes I think what is striking to me about the timing of this meeting, it is coming at a time when both of these men really feel empowered. And Macron recently reelected; Biden coming off of the midterm in which his party performed better than expectations.

And these are also two individuals who really kind of campaigned on and are rhetorically focused on this idea of restoring the kind of way things used to be, which is that America leads on the global stage and that they do it in partnership with Europe.

And as Phil pointed out and as President Biden said, Macron thinks of himself as the leader in Europe. And so for the two of them to be here for the state dinner, it is really important for both countries to signal that this is a kind of dual relationship, a partnership, not just between France and the United States but between France and Europe.

And in spite of all the other tensions that I am sure we will get into, that, the durability of that relationship is the most important factor that they want to emphasize coming out of this.

BOLDUAN: That is a great point.

And when it comes to being a leader of Europe, one area of course that specifically gets to is dealing with Vladimir Putin and how Macron handles him in his approach. He's shown more willingness than other Western leaders to talk to Vladimir Putin.

And Macron actually spoke to that with George Stephanopoulos in a new interview that previewed this whole thing.

(BEGIN VIDEO CLIP)

MACRON: My conviction and my pragmatic approach is to say it. I have to engage with the existing leaders and the warning shot of the country because if we do believe in national sovereignty, we cannot decide to say it's a precondition. It's (INAUDIBLE) chance to stop negotiating pricing (INAUDIBLE) mistakes.

It is impossible to come back at the table and negotiate something. I think it is still possible.

(END VIDEO CLIP)

BOLDUAN: David, what do you see in that?

How much distance is there between Macron and Biden on that?

DAVID SANGER, CNN POLITICAL AND NATIONAL SECURITY ANALYST: Well, I think that President Biden would agree that all wars end in negotiation at some point, quietly they have been signaling to President Zelenskyy of Ukraine that he needs to begin to think toward what that day would look like.

But even if a negotiated solution is the only way out, that does not mean that both sides are ready to negotiate now. And all the indications are that they are not. President Macron has been good at being an interlocutor with Putin. He has done so on the -- on the nuclear plant that has been under attack.

He did so before the invasion. The fact of the matter is, he has been very influential with Putin. There is no indication that any of the things that he has warned Putin about, Putin listened to him.

And on the negotiations, I think it is pretty much the same thing. Right now, both sides believe that they have the upper hand. And until one of them believes that that is not the case.

[11:15:00] SANGER: I do not see a space for negotiation. President Zelenskyy is saying he is not giving up any territory. President Putin is saying he has annexed four provinces within Ukraine.

So it is going to be a long, hard winter in which Putin thinks that he can break the Ukrainians' will by freezing them out. I think before they could get to any serious talks.

BOLDUAN: What a leader says kind of out of the gate is their priority on the agenda is telling. And right out of the game, what Macron was saying in that Oval Office meeting was top priority was energy and the economy.

And also in his previous interview with ABC, he talked about the term that that Phil Mattingly was getting to. He said in the interview he wanted to get back in sync when it comes to trade policies.

This is the point of tension between these two leaders.

How real is that?

How will they make headway on that?

PHILLIP: Yes, it is a big deal. I mean, he raised it in the interviews today. He raised yesterday in his meetings with lawmakers. The part of this you have to kind of take a step back. In the Trump era, there was a pulling away of the United States from climate diplomacy, from these multinational deals, to deal with the climate issue.

There was also a push toward protectionism, meaning the Trump administration trying to do things to protect American industries by putting for example tariffs on European goods.

And Macron had hoped that would end with Biden and it hasn't. And I think that is why you are seeing him raising this so loudly in these meetings today.

BOLDUAN: Absolutely. Much more to come. Abby and David will be here with me. We are going to be standing by for this press conference. Much more later this hour.

As I mentioned earlier, President Biden and the first lady will be hosting a steak dinner this evening for the French president, it is to be on the South Lawn of the White House tonight. And Kate Bennett, she is here now with more on that.

Do you have a preview of what tonight is going to be like?

KATE BENNETT, CNN WHITE HOUSE CORRESPONDENT: Much like the meeting earlier today, the entire evening is going to be about pomp and circumstance. There is a big tent, pavilion the White House is calling it, on the South Lawn.

And there will be about 400 guests, I am hearing this evening. The last time the Macrons were here for president Trump there were about 120 guests. It is much larger, much more involved. First course will be butter poached lobster and some beef and a cake

at the end. But this is really a chance for, again, the two countries to exist together and to play off one another.

French made champagne flutes, but filled with American sparkling wine; a cheese course but with American cheese. So all this of nods back and forth. The color scheme is also red, white and blue. So we will see about tonight.

John Baptiste is singing. It should be a pretty big party here at the White House.

BOLDUAN: Absolutely all that sounding amazing, delicious and beautiful. We will stand by to get more pictures of that, from that cake. Thank you so much. Really appreciate it.

So inflation is cooling off. But as with everything with the economy right now, one headline is not the whole story. We'll get to that and the Fed chairman's latest remarks.

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BOLDUAN: Some encouraging news on the U.S. economy. A key measure of consumer prices that is closely tracked by the Federal Reserve, that slowed in October, offering a hopeful sign that inflation is cooling.

Also out today weekly jobless claims and they ticked down in the last week. But as usual there is a whole lot more to it. Matt Egan is here now with a look at the numbers for us.

Walk us through this.

MATT EGAN, CNN BUSINESS SENIOR WRITER: Let's start with inflation. The Fed's favorite inflation metric came out today that showed that inflation is cooling off 6 percent year-over-year for the PCE index. Normally this would be a bad number because this is how historically -- and it is actually three times hotter than what is considered healthy.

But we obviously are not in normal times. When you look at where inflation has been over time, you can see that is actually cooling off. That trend is very encouraging and it is also raising hopes on Wall Street and Main Street that the Fed is going to be able to chill out these monster rate hikes that are raising foreign calls for all of us.

And also raising recession fears. Now, concerns about the economy have led companies to start to cut jobs, a wave of layoffs in corporate America. AMC Networks, DoorDash, Kraken, all announced 1,000 or more job cuts. That is on top of tech layoffs from Amazon and Twitter and other companies.

But when you look at where the jobs market really is, it still looks pretty solid. New numbers up today show that jobless claims actually fell in the last week. Yes, they have increased a bit in recent months, but they've remained relatively low. In fact, jobless claims are lower than a year ago. And exactly where they were three years ago before COVID-19.

BOLDUAN: Add it all together it remains a big question mark of what this means for everyone. It is great to see you, Matt. Thank you so much.

And add to this picture, what investors are saying right now. Stocks are down at this hour, despite some of this encouraging news. The Dow falling. Where are we now? It is -- the Dow is down as investors are awaiting Friday's jobs report. Christine Romans is here.

How does the Dow end to this? What is happening there?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: So the Dow is up 700 yesterday, it's down a few hundred today. I wouldn't put too much stock into what one day is happening in the stock market. The trend this year is the first lower year for stocks since 2018 and probably the worst year for stocks since 2008.

[11:00:00]

ROMANS: So the trend hasn't been so good for the year. Also news from Salesforce. So you have that.

BOLDUAN: You also have the Federal Reserve chairman yesterday. Everyone reads into every syllable that he expresses so I will not sum it up. I will let him say what is likely coming for the next rate hike.

(BEGIN VIDEO CLIP)

JEROME POWELL, CHAIRMAN, FEDERAL RESERVE: It makes sense to moderate the pace of rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting.

(END VIDEO CLIP)

ROMANS: So we had four hikes in a row really jarring. The next one will be big but not as big as the last ones and the Fed chief can see where you do not have to be going so aggressively after inflation. And that was the good sign for that stock market yesterday.

I think for consumers, the most important thing to remember is interest rates will likely continue to stay high. Maybe for longer than we thought as the Fed tries to get inflation under control.

Big jobs number tomorrow so that will be the next, one economic report, one day in the stock market, so you can judge what is happening on Main Street. BOLDUAN: But we will continue to add it altogether to find it. Thank

you so much.

Curtis Dubay is the chief economist at the U.S. Chamber of Commerce.

Curtis, we have been asking this question for months now, which is what is going on with the economy. And I was frankly excited when I read your words. You are putting words to all of this.

The economy is slowing, the consumers are still spending. People say it feels bad. Inflation is bad. But their own situation is OK, at least right now. And you say this is called secondhand pessimism.

CURTIS DUBAY, CHIEF ECONOMIST, U.S. CHAMBER OF COMMERCE: It is a really unique circumstance. It's hard for economists to make heads or tails of what is going on.

On the one hand you have any survey, whether consumers or businesses, and you will see, though, they will say things are bad and expected to stay bad for a while. But when it comes to actual activity, consumers are spending, earning more income. Recently had that data today. Both are up strongly above inflation.

Businesses, the same thing. They say things are bad. Outlook is bad. But for their specific circumstances, they are hiring more workers, increasing wages and continuing to invest.

That makes it really complex to figure out where we're going afford, especially when it comes to figuring out what the Fed will do. But for our current circumstance, it is good news. I do not know how long it can last but for now we will take it.

BOLDUAN: I was wondering after reading into this, reading your work, is this more of a timing?

Behavior has not yet caught up to the reality that is coming before us.

DUBAY: I think it is we had a huge buildup of savings during the pandemic. And that is helping to buttress spending going forward and has been for several months now. That can only last so long.

But the same time, businesses need to retain workers because they learned how hard it was to operate during the pandemic when they did not have workers they need. They still do not have all the workers they need. So they are keeping their workers on, increasing wages and this delicate balance we're in right now is staying put.

Which is that businesses can keep workers on because demand remains strong. As our people can continue to spend, because they have savings and their incomes are rising. So while inflation remained pretty high and a major, major problem, that we can continue on this for the time being.

I do not want to overstate things. The economy, certainly, cooling, and there are significant risks ahead. But we do have this unique circumstance that we have never seen before.

BOLDUAN: Adding all this together, we are in this moment.

Are we good or are we not good?

Is secondhand pessimism enough to stave off a recession?

DUBAY: That is the big question, of course. The risk of recession remain high in 2023, higher than the normal 50-50, maybe even slightly higher. I think the key thing is that whether we have a recession or we do not -- we had a technical recession for the first half of this year but it did not really matter up.

What I think it means is that if we do have a recession maybe it will not be as severe as it otherwise would be. Or maybe it is out of a recession. We just have a slowdown and we are able to pick back up once inflation cools and, hopefully, in late 2023.

BOLDUAN: Again we continue to just try to track and try to see where this is headed. But thank you, Curtis, for helping put some words to it for me. As we been having this discussion about what is really going on here. What we're feeling and what we're doing and what it really means, I really appreciate it. Thank you.

So weeks after four college students were found dead, there is still confusion about whether the victims were targeted. The very latest from Idaho next.