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Slower Inflation Boosts Economic Confidence, According to Survey; Interview with The New York Times Federal Reserve and Economy Reporter Jeanna Smialek; Economic Recovery at Risk Due to Fighting in Ukraine and Middle East; Top 10 Political Stories of 2023; Airport Delays and Cancellations Caused by Chicago Fog; Huge System Causing Significant Snow and Rain in Certain US Regions. Aired 10:30-11a ET
Aired December 25, 2023 - 10:30:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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SARA SIDNER, CNN NEWS CENTRAL CO-ANCHOR: All right. Decreasing inflation seems to be improving people's outlook on the economy. A survey from the University of Michigan shows that attitudes on the U.S. economy soared 14 percent this month. That's largely due to those easing price increases. Last month, inflation fell for the first time in more than three years.
Joining me now is Jeanna Smialek, the Federal Reserve and Economy Reporter for "The New York Times." Thank you so much for coming in. Look, it's kind of nice to hear a little good news. Why should Americans be a bit optimistic about the economy right now, especially their own personal economies?
JEANNA SMIALEK, FEDERAL RESERVE AND ECONOMY REPORTER, THE NEW YORK TIMES: Yes. So, I mean, we are seeing some pretty good news on the price front. So, what we saw this last month was the first decline in the month over month price level that we've had since early 2020. So, really the first experience of this we've had since before the pandemic. And what we're seeing in a, sort of, broader sense is that inflation has been slowing down for months. We're still seeing prices increase on a year over year basis, but they're doing so a lot more slowly than they previously were.
And so, that should be bringing some relief, especially in a world where people are earning decent wage increases at the moment. You know, we're seeing wages climb faster than prices are climbing and that should leave households sort of playing a game of catch up with the price increases we saw earlier, but finally making some headway in that game of catch up. And so, I think it's a pretty optimistic moment.
SIDNER: Yes, when you look at interest rates, though, and people look at buying housing, there's a lot of consternation there and nerves as you watch how expensive things are and how high the interest rates are. Do we think that the interest rates are going to stay the way they are? Will they drop some or will they go back to a, sort of, more aggressive lifting of the of the interest rates, you think? SMIALEK: Yes, great question. So, you know, people who are watching this closely every day who are thinking about buying a house are probably aware that mortgage rates have actually used a little bit in the last couple of weeks, which is very much because people think that the Federal Reserve is actually going to start cutting interest rates pretty soon in the near future. If you look at what investors and markets are predicting, they think that we could start seeing those interest rates coming down as soon as March.
And so, in the pretty near future, we could be looking at a less intensive interest rate environment. And I think that that's good news for households and that markets tend to adjust ahead of those things. And so, we're probably past the worst when it comes to mortgage rates, unless some surprise happens. And we may in fact be headed for a substantially lower mortgage rates within the next couple of months.
SIDNER: I mean, two bits of good news. This is -- we're batting a thousand so far. But there are some stumbling blocks. The world economy seems to be struggling with mounting geopolitical tensions. Do you see things getting, sort of, worse and how that might affect the United States, obviously, as we are a global economy?
SMIALEK: Yes. So, if you talk to any economists today, pretty much, they will tell you that the number one risk to all of those positives that we just listed our geopolitics. You know, if we saw a situation where the situation with Hamas and Israel, or any of these other tensions that we're watching closely, be it China, be it something in the Middle East would explode.
[10:35:00]
You could really see that sort of escalating and choking up supply chains, making gas more expensive and that could cause inflation to rise again and keep interest rates from coming down. And so, if there's a big risk out there on the horizon, that is certainly where it lies.
SIDNER: Could be in the Red Sea, could be Middle East, could be China, could be Ukraine. There's a whole lot going on in the world today. Jeanna Smialek, thank you so much for coming on and have a happy holiday.
SMIALEK: Thank you.
KATE BOLDUAN, CNN NEWS CENTRAL CO-ANCHOR: Coming up for us, 2023 brought unprecedented political chaos. We're counting down the top 10 political stories of the year.
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BOLDUAN: From courtrooms to corruption allegations to one booted house speaker and also a lawmaker caught in so, so many lies, political chaos was definitely not on short supply in 2023. CNN's Eva McKend takes a look back at the top 10 political stories of the year.
[10:40:00] (BEGIN VIDEO CLIP)
EVA MCKEND, CNN NATIONAL POLITICS REPORTER: When it comes to the top 10 political stories of 2023, this was another big year with unprecedented chaos in Washington, courtroom spectacles, and accusations of brazen corruption.
MCKEND (voice-over): At number 10, Senator Bob Menendez faces corruption related charges.
MANU RAJU, CNN ANCHOR, INSIDE POLITICS SUNDAY AND CNN ANCHOR AND CHIEF CONGRESSIONAL CORRESPONDENT: But you're being accused of aiding a foreign government, why is it appropriate for you to go into a classified briefing?
SEN. BOB MENENDEZ (D-NJ): Bottom line is, I'm a United States Senator. I have my security credentials and an accusation is just that. It's not proof of anything.
MCKEND (voice-over): Menendez and his wife are accused of accepting hundreds of thousands of dollars in bribes, including gold bars, cash, and a luxury vehicle in exchange for the senator's influence. The indictment led Menendez to step aside as chair of the powerful Foreign Relations Committee. But the New Jersey Democrat and his wife maintain their innocence and have pleaded not guilty. He has pledged to remain in his seat despite calls from many lawmakers to resign, including from some of his fellow Senate Democrats.
At number nine, a moving tribute to Rosalynn Carter, the former first lady, humanitarian and mental health advocate. Former President Jimmy Carter emerges from hospice care to attend a public memorial service, paying tribute to his late wife, which also brought together the First Ladies Club. The Carters became internationally known for their humanitarian work after Carter's stinging presidential defeat in 1980. They have the longest marriage in presidential history at 77 years.
MCKEND: Number eight, Hunter Biden's high stakes plea agreement with federal prosecutors falls apart.
ABBE LOWELL, HUNTER BIDEN'S ATTORNEY: The prosecutors who came forward to us and were the ones to say, can there be a resolution short of a prosecution?
MCKEND (voice-over): Now, he's facing three federal firearms charges and nine new tax charges. The case could pose another challenge to President Joe Biden's reelection bid with House Republicans also investigating the president's son and pursuing an impeachment inquiry into the Democratic incumbent. So far, the GOP-led probe has struggled to uncover wrongdoing by the president.
HUNTER BIDEN, PRESIDENT BIDEN'S SON: I'm here today to make sure that the House Committee's illegitimate investigations of my family do not proceed on distortions, manipulated evidence, and lies.
MCKEND (voice-over): Number seven. Foreign wars create political fractures at home, from the halls of Congress to college campuses. President Biden calling on Americans to unite behind Israel and Ukraine in their respective conflicts.
JOE BIDEN, U.S. PRESIDENT: American leadership is what holds the world together. American alliance is what keep us, America, safe.
MCKEND (voice-over): But the president facing skepticism from Republicans on providing more aid to Ukraine.
SEN. J.D. VANCE (R-OH): Republicans disagree amongst themselves about exactly how we should respond to the Ukraine question.
MCKEND (voice-over): And pressure from some in the progressive wing of Biden's own party over Israel.
REP. RASHIDA TLAIB (D-MI): President Biden, not all America's with you on this one. And you need to wake up and understand that.
MCKEND (voice-over): Number six. The Republican race for the White House takes shape.
DONALD TRUMP, FORMER U.S. PRESIDENT AND U.S REPUBLICAN PRESIDENTIAL CANDIDATE: We're going to win the Iowa caucuses. So, that should be --
MCKEND (voice-over): Donald Trump closes out the year as the commanding front-runner for the GOP nomination as his rivals battle to emerge as the leading alternative to the former president. After entering the race as the top threat to Trump, Florida Governor Ron DeSantis' rise was slowed amid a shaky campaign launch in a series of campaign resets.
GOV. RON DESANTIS (R-FL), U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: We're going to have this debate in Iowa before the caucus. I will be there. Donald Trump should be there.
MCKEND (voice-over): Meanwhile, Former South Carolina Governor, Nikki Haley, gained momentum late in the year after several strong debate performances.
NIKKI HALEY, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: Where have you all been?
MCKEND (voice-over): Amid Trump's dominance, several GOP hopefuls dropped out before the calendar turned to 2024, including Former Vice President Mike Pence, South Carolina Senator Tim Scott, and North Dakota Governor Doug Burgum.
Number five, the potency of abortion rights in a post-Roe America. More than a year after the Supreme Court overturned Roe versus Wade, abortion rights proved to be a galvanizing issue for Democrats.
UNIDENTIFIED FEMALE: We want to protect abortion access.
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MCKEND (voice-over): Helping deliver victories for Democratic candidates in off-year elections in Virginia and deep red Kentucky, and voters in Ohio passing a ballot measure to enshrine abortion rights in the state constitution.
UNIDENTIFIED MALE: We did it.
MCKEND (voice-over): Number four, President Joe Biden announces his reelection bid, facing significant political headwinds and setting up a potential rematch with Donald Trump.
J. BIDEN: It is time to finish the job. Finish the job.
CROWD: Four more years. Four more years. Four more years.
MCKEND (voice-over): Biden's bid for a second term is imperiled by stubbornly low approval ratings and persistent questions about his age. His campaign leaning on his legislative record and drawing a contrast with his 2020 rival.
J. BIDEN: There's an extremist movement who does not share the basic beliefs in our democracy, the MAGA Movement.
MCKEND (voice-over): Despite weariness from some Democrats, Biden is expected to face little resistance in winning the party's nomination in 2024, drawing long shot challenges from Minnesota Congressman Dean Phillips and author Marianne Williamson. Several third-party candidates have also announced, including Robert Kennedy Jr. and Progressive scholar, Cornel West, who could turn into wild cards in the general election.
MCKEND: Number three, embattled congressman George Santos expelled.
REP. GEORGE SANTOS (R-NY): I don't care.
MCKEND (voice-over): The U.S. House voted to expel the New York Republican after a scathing ethics report in a year-long swirl of controversy about Santos's litany of lies. Santos becomes just the sixth member in history to be expelled from Congress, and the third since the Civil War.
SANTOS: Why would I want to stay here? The hell with this place.
MCKEND (voice-over): After winning a battleground House district, major pieces of Santos biography fell apart, including his claims around his education, professional experience and family background. Santos was later indicted on federal charges, including wire fraud and money laundering, but pleaded not guilty and has denied the allegations.
SANTOS: And I'm not really commenting on the ongoing investigation.
MCKEND (END VIDEO CLIP): Santos reemerged soon after being removed from office on the celebrity video message site Cameo.
SANTOS: Well, happy, happy birthday.
MCKEND (voice-over): Number two, Kevin McCarthy becomes the first house speaker removed from the post. McCarthy's ouster came 10 months after he claimed the gavel, following a floor fight that went five days and took 15 rounds of voting that divided the GOP and saw the California Republican bend to a series of concessions to hardline conservatives. In the end, eight House Republicans joined with Democrats to depose McCarthy.
REP. KEVIN MCCARTHY (R-CA), FMR. U.S. HOUSE SPEAKER: It's frustrating because it's just a few, these eight working with all the Democrats, to ruin the reputation of the Republicans.
MCKEND (voice-over): The move sparked weeks of chaos and infighting among House Republicans as they struggled to coalesce around a successor before ultimately voting to elevate little known Louisiana Congressman Mike Johnson as the new speaker.
REP. MIKE JOHNSON (R-LA), U.S. HOUSE SPEAKER: I want to thank you all for the trust that you have instilled in me.
MCKEND (voice-over): Number one, the country's 45th president and leading Republican presidential candidate becomes the first former president to face criminal charges.
DONALD TRUMP, FORMER U.S. PRESIDENT AND U.S REPUBLICAN PRESIDENTIAL CANDIDATE: I won't be able to go to Iowa today. I won't be able to go to New Hampshire today because I'm sitting in a courtroom.
MCKEND (voice-over): Trump is facing 91 criminal counts, ranging from conspiracy to obstruct justice, to racketeering across four separate jurisdictions in New York, Washington, D.C., Georgia, and Florida. Trump denying all those accusations.
JACK SMITH, SPECIAL COUNSEL PROSECUTING DONALD TRUMP: An indictment was unsealed charging Donald J. Trump with conspiring to defraud the United States, conspiring to disenfranchise voters, and conspiring and attempting to obstruct an official proceeding.
FANI WILLIS, FULTON COUNTY DISTRICT ATTORNEY: The defendants engaged in a criminal racketeering enterprise to overturn Georgia's presidential election result.
MCKEND (voice-over): The Fulton County, Georgia indictment resulting in this historic image, the first mug shot of a former U.S. president. The former president regularly turning his courtroom appearances into campaign style events.
TRUMP: This is a witch hunt, the likes of which probably nobody has ever seen.
MCKEND: In a preview of 2024, when the political and legal calendars are set to collide. Eva McKend, CNN, Washington.
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SIDNER: Thank you to our friend, Eva, for all of that.
And now we want to take a quick moment to share some holiday greetings from American service members who are serving overseas on this Christmas.
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BRIG. GEN. MARLENA A. DECELLE, U.S. ARMY: Gen. Marlena DeCelle, greetings from Jordan. On behalf of all the soldiers that are here from the 48th Infantry Division, on behalf of Task Force Spartan, we want to wish all of you a very Merry Christmas.
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BRENDA STRAUGHTER, PASSENGER STRANDED AT MIDWAY AIRPORT: The luggage downstairs was lined up for at least four blocks full of people trying to get their luggage because they've been canceled Saturday and Sunday and nobody got their luggage. It's terrible. It's terrible. I'm just -- I'm just -- keep trying to keep a smile, keep a positive outlook to keep from crying.
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[10:55:00]
SIDNER: Poor thing. Poor Brenda. She's going through it as so many passengers are. That was just one of many Southwest Airlines passengers stranded at Midway in Chicago over the weekend after dense fog forced dozens of flights to be delayed and canceled. The fog has lifted, thank goodness, but the backlog means a lot of those travelers may be missing Christmas Day with their families and friends.
And I am the bearer of bad news. There are weather issues in a lot of other parts of the United States, including blizzard conditions in the Central Plains and heavy rain in the south. Meteorologist Chad Myers is tracking this all for us.
Chad, if you're going to come on this program on Christmas Day and treat us so poorly with this bad weather, I'm going to have some grievances that I will list out for you at the end of this time. So, there better be something good in your forecast, sir.
CHAD MYERS, CNN METEOROLOGIST AND AMS METEOROLOGIST: Wow.
SIDNER: I'm waiting for it.
MYERS: That might be next week. Back behind me, my college town, Lincoln, Nebraska, seeing some snow. And the snow is all the way across I-70, I-80, I-76. There's your snow right there. Winds are going to be out of the north at 50 miles per hour. Down here, there's going to be some strong weather, it could be lightning and thunder. But other than that, this is kind of a grandmother's house. You go through the blizzard here, I'm afraid in some spots, but it's the rainfall, I think that's bigger problem here. It's going to slow you down, but not stop you. But there will be some spots that pick up two to four inches of rain.
Take you to 8:00 tonight, it's raining across the south. It's still snowing here. But by morning, that snow gets back toward Denver, and that could slow some things down at the airport there. Rainfall up and down the East Coast. And then we start moving away into Tuesday and Wednesday when people try to get back home, and the problems will be here in the northeast where the airports could be slow. I know not every plane goes through the northeast, but so many of them do.
And I didn't fulfill your Christmas wish, Sara. I'm sorry.
SIDNER: Chad, come on, buddy. Do better.
MYERS: It'll be sunny in Texas.
SIDNER: OK. Well, that's where I'm going, by the way. So --
MYERS: Oh, great.
SIDNER: -- just so you know, I'm actually headed there. So, Chad, you know what? You just brightened my day. Look at you. No longer the Grinch. Thank you.
BOLDUAN: Slightly different than always sunny in Philadelphia, but still sunny in Texas. We'll take it.
Coming up for us, U.S. officials, including Secretary of State Tony Blinken, are set to meet with Mexico's president as a new caravan of migrants has just started to make their way for the U.S. southern border. We'll be right back.
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