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Fed Decides To Pause Interest Rate Hikes; Garland Defends Special Counsel After Trump Attacks; Trump Defiant After Arrest & Arraignment On 37 Charges. Aired 2-2:30p ET

Aired June 14, 2023 - 14:00   ET

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

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BORIS SANCHEZ, CNN ANCHOR: We are just moments away from finding out whether Fed Chair Jerome Powell will hit the pause button after 10 straight interest rate hikes given how far inflation has fallen. We're going to tell you how this could make your life just a little bit easier.

BRIANNA KEILAR, CNN ANCHOR: Yes, please. And while there have been warnings that artificial intelligence could cause global extinction, it's also allowing the Beatles to come together one more time. Paul McCartney says a new song will be released. We're following these major developing stories and many more all coming in right here to CNN NEWS CENTRAL.

SANCHEZ: Breaking news. The Chairman of the Federal Reserve is announcing a decision over whether to raise interest rates in the 11th straight time. Joining us now is CNN Chief Business Correspondent Christine Romans. And also with us, CNN Economics and Political Commentator Catherine Rampell. Christine, first you. What is the news from the Fed chair?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Well, the Fed not moving here. For the first time in a long time, the Fed is not raising interest rates. You know, there have been 10 rate hikes and a very aggressive rate hike campaign has been underway but the Fed pausing here, noting that recent indicators suggest economic activity is expanding at a modest pace, job gains have been robust, and the unemployment rate has remained low but inflation remains elevated.

That's key. Because the last couple of inflation numbers we've received have been showing some cooling on the inflation front. So, this is a Fed that is pausing, going to assess all of that rate hiking that's already in the system to see how it's working.

SANCHEZ: Catherine, do you -- there was some question as to whether or not this was a pause or a skip. At the end of the day, it means that interest rates are not moving. What does this say to you?

CATHERINE RAMPELL, CNN ECONOMICS & POLITICAL COMMENTATOR: Well, yes. This means that at this particular meeting, they are not raising interest rates further after those previous 10 consecutive rate hikes. That does not necessarily mean that we are done with raising interest rates for this cycle.

In fact, if inflation numbers continue to come in hotter than the Federal Reserve has been comfortable with, we could see further interest rate hikes later this year. And the projections have actually just come out. I'm looking at the numbers.

It looks like they are actually projecting that the federal funds rate will be a little bit higher through the end of this year. The federal funds rate is the main interest rate that we're talking about that they had projected a few months ago. So, that suggests that they do think that they have more work to do even if for the time being they're letting things be.

But again, it really depends on how the data come in. It depends on whether we see continued elevated price growth and if we see the labor market holding up.

SANCHEZ: And, Christine, do you -- the markets are now responding to this. The Dow down about 280-ish points -- 288 points. It's been down most of the day.

ROMANS: Yes.

SANCHEZ: What do you make of this?

ROMANS: And we should note that stocks had been sitting near one-year highs here, among other things on the hopes that the Fed would pause. But Catherine is actually -- absolutely right. When you look inside these numbers, you can see that the Fed and some members are saying that they'd like to see four or more rate hikes so -- when you look within what Fed members are saying. So, you've got a fed that is likely to have more rate hiking in the months ahead.

Now remember, you know, the Fed has been hiking that rates for 15 months, right except for today. And in that time, more than four million jobs have been created, the unemployment rate has fallen to three and a half percent backed off that a little bit more recently, the housing market is starting to pick up a little bit and shown some resilience, and in the stock market is near a one-year high. So, there are those who are saying that maybe the Fed needs to continue to tap the brakes to make sure this economy doesn't overheat. And we really truly do have inflation starting to get under control.

SANCHEZ: Right. And, Catherine, ultimately what does this mean in the short term for consumers?

RAMPELL: In the short term, this means that you probably won't see rates going up for things like mortgages, car loans, credit card payments, or at least not as quickly as we've seen over the past little over a year, as the Fed has each meeting -- in prior meetings, and you know, since March of 2022, has been raising rates.

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So, you know, it's not exactly a one-to-one transmission that when the Fed raises the Fed funds rate that that means, you know, mortgage rates go up by an equivalent amount. But it looks likely that in the very near term, you won't see much of a change.

Now, again, that doesn't mean we are out of the woods yet with inflation or with rate hikes. It could be -- it could very well be that later this year, you will continue to see interest rates going up. And again, that when the Fed pulls the lever on the Fed funds rate, usually that has some consequences for consumers for those other kinds of financing products that they buy.

Consumers and businesses for that matter. It becomes more expensive for businesses to borrow, for builders to borrow to build homes, etcetera. So, you know, it's very hard to say whether, at the end of this year, we will see a lot higher rate hikes-- excuse me, a lot higher interest rates or potentially lower interest rates. Again, the Fed is projecting that they will continue to raise rates. But if we do see weakness in the economy, they may decide to continue pausing or ultimately reverse course.

I know that there are a number of people in the markets, investors who have been betting on a recession later this year, potentially causing the Fed to not only stop raising rates but to potentially cut them. Now, you know, I hope we don't end up in that state of the world. Obviously, the Fed is not predicting it overall. But it's still a possibility.

SANCHEZ: And, Christine, there was one more thing that caught your eye.

ROMANS: Yes. I'm seeing here that the Fed has upgraded its expectations for GDP saying the economy is going to be stronger this year than we had thought. Overall, growth this year of one percent. In its March projection, it had only a 0.4 percent number. And in 2024. it's looking pretty much the same at 1.1 percent.

But that would say that the recession watch that has been unending. The Fed is now saying it looks like growth is still going to hold in there in positive for this year. And again, that is what gives it room for more rate hikes later this year, if it needs to do that.

SANCHEZ: That ongoing recession watch that we've been on now for like a year and a half, right? I just want to point out very quickly --

ROMANS: Longest in history.

SANCHEZ: The longest in history, right, the -- that I just want to point out very quickly as we've been speaking the Dow dropping another 70 points or so. Christine Romans, Catherine Rampell, appreciate the perspective. Thanks so much. Of course. Brianna?

KEILAR: Attorney General Merrick Garland making his first public comments since the historic arraignment of former President Donald Trump. He didn't address the charges specifically, maybe not surprising. He did push back and defend the special counsel against attacks. Here it is.

(BEGIN VIDEO CLIP) MERRICK GARLAND, U.S. ATTORNEY GENERAL: As I said, when I appointed Mr. Smith, I did so because it underscores the Justice Department's commitment to both independence and accountability. Mr. Smith is a veteran career prosecutor. He has assembled a group of experienced and talented prosecutors and agents who share his commitment to integrity and the rule of law.

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KEILAR: Also racking up the dough after ruling out a federal court. One of the biggest questions following former President Trump's historic federal arraignment is how would Republicans respond. But we now have the new stunning fundraising numbers. We're going to bring those to you in a moment.

First, though, let's bring in CNN's Katelyn Polantz. She is in Miami for us. We know that Walt Nauta, his co-defendant here, is going to be arraigned in two weeks, Katelyn. What are we learning about what is next in this case?

KATELYN POLANTZ, CNN SENIOR CRIME & JUSTICE REPORTER: So, there is that arraignment, that formality where the defendant, Walt Nauta, the co-defendant of Donald Trump also accused of obstruction of justice has to formally tell the court. He pleads not guilty to get this case moving toward trial.

And one of the things, Brianna, that's going to be happening, almost immediately is the Justice Department has to come up with a list of witnesses. They said they didn't have one yet, but they are going to have a list of witnesses whom Donald Trump will not be able to speak to about the details of this case. That's part of his bond condition and also Walt Nauta's bond condition as well. They can't speak to each other about the case either.

And one of the things about that, in speaking to what Merrick Garland, the Attorney General, also has saying today is that Garland talks about the independence of the special counsel and the independence of the Justice Department. This special counsel is set up as a mechanism -- as the prosecutors to have a little bit more distance from the administration -- the Biden administration.

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And also now that this case is in court as of yesterday, there's the judiciary, right, the entire federal court system, which is a whole other branch of government that is going to be keeping tabs on this case, what Donald Trump does as he is awaiting trial, what he says, especially when he's communicating to people working around him who might be call it -- will be called as witnesses for that trial. Brianna?

KEILAR: Yes, very interesting point there, Katelyn. I do want to bring in former Trump White House lawyer James Schultz and CNN legal analyst Karen Friedman Agnifilo to talk a little bit more about this. Jim, one of the things -- when you hear the former president and his allies attack this process, one of the things they do is they seize on the Espionage Act being the basis for this indictment.

They say it's a reach, he's not a spy, and certainly, this is a salient point with his supporters. What about in court? Is that a salient point there?

JAMES SCHULTZ, FORMER TRUMP WHITE HOUSE LAWYER: So, I'm not sure that they're going to be making the same arguments in court that they're making to the general public. I mean, we've seen that time and time again throughout some of these issues involving the former president. So, I think the Espionage Act is very clear.

There's confidential information. You know it's classified information. The information isn't to be taken out of the building.

The information isn't to be disseminated. You know, it doesn't really require you to give it to a foreign country. It doesn't really require -- it doesn't -- absolutely it doesn't require you to even -- to give it to a foreign country or to be a spy. So, that's going to be something that they're going to talk about in the political realm. And I think there's going to be a big difference between what's said in the political realm and what's said in the courtroom.

KEILAR: Yes, I think you're definitely right there. Karen, you just heard Katelyn outlining the restrictions that Trump and Walt Nauta are supposed to abide by, right? They are barred from discussing the case with each other, and also from other witnesses. How can the court even enforce this, especially considering Trump is telling all of us, right, he's communicating with all of us about this court case publicly?

KAREN FRIEDMAN AGNIFILO, CNN LEGAL ANALYST: Yes. So, it's complicated, right? You'd have to have a witness come forward and say that Trump is communicating with them. It's really to protect the case and protect the witnesses from being bullied by Donald Trump, or in some way, him having to try to influence them.

Because, you know, there's a power dynamic that is very different, right between Donald Trump and the rest of the world, especially his -- the witnesses who are going to testify against them. So, it's really to protect them. And hopefully, if he does do that, they can come forward and the court can handle it from there.

KEILAR: I wonder, Jim, what if this drags on until after the 2024 election? I know that's a hypothetical. But if he were to win the election, and then there is supposed to be a trial, it's a hypothetical that perhaps is worth discussing considering he is the leading candidate on the Republican side right now. What do you think?

SCHULTZ: Look. I don't believe that this gets delayed until beyond the 2024 election. I just don't. There is -- you know South Florida is typically a southern -- District of Southern Florida's usually known to be a rocket docket state. There is the Speedy Trial Act requires the -- you know trial within 70 days, I don't think we're going to see it within 70 days.

But that being said, I think the government has been clear that they believe that they have a pretty simple case that they're ready to go to trial and that they're ready to go to trial and do it in a speedy fashion. So, I think it's really going to be incumbent upon the judge to referee this thing in a way that we're not waiting until after the election to have this trial that it happens in a prompt way. And I think the government is going to be pushing for them. Now, Donald Trump's lawyers are going to be pushing the other way, saying, look, there's a lot of motions here, there's going to be a decent amount of motion practice, which is true, but the judge is going to be the one controlling that timeframe.

KEILAR: Karen, is that your expectation on the timeline?

AGNIFILO: Yes, absolutely. And, you know, we've seen in other court cases, Donald Trump's legal team's legal strategy is to delay, delay, delay, and disrupt. And so, he's going to try to delay this case.

I don't think he wants to go to trial because I think in -- you know, if I were his lawyers, I'd be thinking, well, let's instead get you elected, and then you can pardon yourself, you know if that would even hold up in court. But you know -- or you know, in reality. But I think that's what they would -- or at least pull the investigation, right from the DOJ.

So, you know, I think a delay is really what he's going to try to do, and that really is the judge. And this judge, Judge Aileen Cannon is one who already has shown and was reversed, actually because she was shown that she has some sort of bias towards Donald Trump already. So, you know, we'll see what happens. But it really will be what her -- in her control to see if this -- if this actually goes before the election.

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KEILAR: Yes, it will be very interesting to see how she factors into that. Jim, we've heard from the former president and also from his allies as well. He's very fixated on how Hillary Clinton handled classified information. Why is he so fixated on that, and what if anything, about her 2016 case is relevant in your opinion here?

SCHULTZ: So, look. Again, you're talking about the political realm versus the courtroom, right? In the political realm, it's incredibly relevant because he's picking a high-profile Democratic person, Hillary Clinton, to attack on issues that you know were obviously front and center during the 2016 race. That's really not going to come into play in the courtroom, right?

I think in terms of strategy in the courtroom, I think what you're going to see from the Trump team is a plan to try to get evidence suppressed that supports the indictment. They're going to look at the affidavit of probable cause that went into the -- that supported the raid on the -- on -- in the warrant for the raid on Mar-a-Lago. And they're going to try to attack that affidavit of probable cause.

They're going to look at the testimony of Trump's lawyers. And they're going to you know look at that carefully and try to poke holes in the idea that this -- the crime-fraud exception applied to the attorney- client privilege. Because obviously, if he had privileged with his lawyers, they're going to try to say that, look, the court went too far and allowing that testimony.

And they're going to end the written documentation that came in. That's going to be the attempt at the motion level, very high bars to clear here and clearly an uphill battle. But I think that's the motion practice you're going to see.

Also, the Confidential Information Procedures Act is something that's going to come into play because there's obviously confidential documents and -- Classified Documents Procedures Act, there's classified documents that are going to come into play here. And those are they're going to have to be redacted or declassified for purposes of presentation. That's going to be motion practice as well and that's something that's Trump team's going to bring front and center.

KEILAR: James Schultz, Karen Friedman Agnifilo, thank you so much to both of you for the conversation. I really appreciate it. Boris?

AGNIFILO: Thank you.

SCHULTZ: Thank you.

SANCHEZ: One man's federal charge is the same man's fundraising opportunity. When we come back, how former President Donald Trump is using his federal indictment to bolster support, and just how much that support adds up?

And months after the U.S. shutdown the Chinese spy balloon, Secretary of State Antony Blinken is heading to China looking to reduce tensions. We have details on that trip.

And later, an autopsy showing that Olympic gold medalist Tori Bowie died from complications of childbirth, adding to outrage over the rising maternal death rate in the United States, especially for black women. You're watching CNN NEWS CENTRAL. We'll be back in just moments.

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KEILAR: The federal case against former President Donald Trump has yet to be tried, but it's already proven to be a moneymaker for his 2024 bid.

SANCHEZ: Yes. A source says the Trump campaign raised more than two million dollars from his -- from his Bedminster, New Jersey event which happened just hours after his arraignment. Let's get some perspective now with CNN's Jessica Dean and Jeff Zeleny. Jessica, the former president not only raised money. He also got some feedback from donors.

JESSICA DEAN, CNN CONGRESSIONAL CORRESPONDENT: That's right. That's what sources were telling us. So, once he was in Miami, he then flew to Bedminster where he had this fundraiser with, obviously, his high- dollar donors.

And as we know, he likes to do. He wanted feedback. He wanted to hear how great of a job he had done. So, we -- sources telling us that he had -- was going around asking people their opinions, also complaining about the indictment, but then kind of giving himself credit for how well he had handled it.

We actually spoke to one donor that was there. And he told us that he found the former president to be "full of fire" and said, I liked the man's courage and strength. So, he seemed to be a bit more positive once he got to New Jersey. And among friends, obviously.

KEILAR: He's using it to his advantage --

DEAN: Totally.

KEILAR: -- as best as he can --

DEAN: Yes.

KEILAR: -- which is very Trump. So, he may have some scheduling issues, right? I mean, we all know how we can have scheduling conflicts from time to time, but this really takes it to a new level. He's got campaign events which he's trying to keep, and then he's got court proceedings. How is he going to do this, Jeff?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Well, look. I mean, he is trying to essentially turn this legal challenge into a political opportunity. So, really, his campaign now is part of his case. There's really -- it's impossible to delink them.

But the schedule is one big example of that. There are campaign events. There also are the accord events. I think we have a -- look at the schedule here, of course, the first Republican debate in August. It's unclear if he will attend that.

The opening of the voting begins in Iowa, likely in January, sometimes followed by the New Hampshire primary. Their super Tuesday there. And getting way ahead of ourselves on Election Day -- the General Election Day.

But a lot of legal analysts and lawyers believe that this case may not go to trial at the end of the day until after the general election. So, it's likely that Republican voters will have a say before jurors ever do.

SANCHEZ: And, Jessica, notably, Trump handled this a little bit differently than he handled the New York indictment. And sources indicate that his lawyers learned something from that first experience.

DEAN: Yes, they took that first indictment kind of glean some information from that. And they're telling us in reporting from my colleague, Kristen Holmes, that they've really developed a playbook now -- what they like to call a playbook that they really feel like they should be playing out in the court of public opinion not in the courtroom, per se.

And that is where the former president tends to thrive is when he can get out in front of people, in front of his supporters, really make his case, and they believe that that's where he can be the most effective. So, we can expect to see more of that. And let's all remember that down the road, many experts believe he will be indicted a third time in Georgia down the road. So, they may be pulling this playbook out yet again.

KEILAR: And so, the goal of winning the election becomes not just to exact his agenda again, right, it becomes about self-preservation?

ZELENY: I mean, it does, in many respects. And again, these are very linked events. But it's interesting to see how some of his rivals are beginning to tiptoe ever so gently into criticizing or raising questions about the serious nature of this. And I believe we have some sound from former Vice President Mike Pence, who talked about the serious nature of this indictment.

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MIKE PENCE, FORMER VICE PRESIDENT OF THE UNITED STATES: I had a chance to -- I had a chance to review the indictment over the weekend. And this indictment contains serious charges. And I cannot defend what is alleged. That -- I can't -- I just can't -- I can't believe that politics didn't play some role here.

(END VIDEO CLIP)

ZELENY: So, trying to have a bit both ways there saying a serious indictment, questioning of politics played a role. But he also went on to say that the substance of this is serious because of the military secrets. His son is a marine.

We've heard Nikki Haley mention that a couple of days ago. So, look for Republican rivals to talk about the substance of the indictment because that is what concerns many voters as they look ahead to that general election. Is he -- you know, should he be commander in chief again?

SANCHEZ: You're both often on the road speaking not only to these candidates but to voters as well. Have you gotten any sense from either whether there is Trump fatigue because of all the talk over his indictments?

DEAN: I certainly think. We were in Iowa together --

ZELENY: Yes.

DEAN: -- about a week or two ago. And then I went on to New Hampshire, you are -- and I will longer. I think you get the sense from talking to people, they're curious.

They really want to know about Tim Scott or they want to know about Ron DeSantis. When I was in New Hampshire with Ron DeSantis, you know we were in kind of the smaller settings in New Hampshire, and he's going through the agenda that he enacted in Florida.

And I would see people kind of turn to each other and go, did you know that? Did you know that? And so, they certainly are paying attention. Now, whether or not that means that they will swing from the former president, who's to say?

ZELENY: There is Trump fatigue. But one of the issues with that is among those who feel Trump fatigue, they're divided up so many different ways --

DEAN: Right.

ZELENY: -- because there are nearly a dozen candidates in the race now.

SANCHEZ: Right.

ZELENY: So, that, of course, benefits Donald Trump more than anyone.

KEILAR: Yes, it is quite the field. Those are going to be some debates assuming all those folks get to them. Jeff and Jessica, thank you so much to both of you.

ZELENY: Sure.

KEILAR: Secretary of State Antony Blinken about to make a high-stakes trip to China in an attempt to put the spy balloons and close calls with ships and airplanes in the rearview mirror. We'll have more on that next.

And officials say the demolition of the damaged portion of I-95 is expected to be completed tomorrow. We'll have details on how long drivers will be looking for alternate routes in Philadelphia.

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