Return to Transcripts main page

CNN News Central

Federal Reserve Leaves Key Interest Rate Unchanged; House Votes On Whether To Hold Attorney General In Contempt; Biden Administration Closely Tracking Russian Navy Ships In Cuba. Aired 2-2:30p ET

Aired June 12, 2024 - 14:00   ET

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

(COMMERCIAL BREAK)

[14:01:43]

BRIANNA KEILAR, CNN HOST: Any minute now, the Fed will make a decision on interest rates. And this is an announcement coming on the heels of a promising new report on inflation, one that has Wall Street buzzing. Ahead, what this all means for your bottom line.

BORIS SANCHEZ, CNN HOST: Plus, echoes of the Cold War, the Kremlin sending a group of Russian Navy ships, including a nuclear powered submarine to Cuba, that convoy now just 90 miles from U.S. soil.

So, what message is Vladimir Putin trying to send with this visit?

And CNN getting rare and exclusive access to a site in Syria that a U.S. official once called a breeding ground for the next generation of ISIS. We'll show you what we found there.

We're following these major developing stories and many more all coming in right here to CNN NEWS CENTRAL.

We begin with breaking news at any second now, we're expecting the Fed's latest decision on interest rates. We're going to go directly to our team at the moment that we have reporting from the Federal Reserve after a new report that shows inflation cooling in May, expectations are high that we might get projections for a rate cut later this year.

Prices for everyday items flatlined compared to a month earlier, marking the first time inflation has been at zero in two years.

Over the past year or so, consumer prices rose by 3.3 percent, according to statistics from the Labor Department.

Let's start with CNN's Matt Egan. So, Matt, what is the decision?

MATT EGAN, CNN REPORTER: Well, Boris, you know, we just got this a no change in interest rates from the Federal Reserve, the Fed is on hold for a seven consecutive meaning, that means no relief from these high borrowing costs. Rates are at 23 year highs, no relief yet in terms of mortgage rates, credit cards or car loans.

The Fed statement did make a significant change. The Fed now says that there has been, "modest further progress towards the committee's two percent inflation goal." That is an upgrade from the previous statement, which had said that there'd been a lack of further progress. That is a nod to the report that we just got out today.

Now, looking ahead, the Fed is still projecting interest rate cuts this year. But it no longer is projecting three cuts, we knew it would come down. The Fed is now projecting just one interest rate cut this year.

Now, remember, there's only four meetings left this year after today. So, that does raise some questions about whether or not the Fed is going to be able to start lowering interest rates before the election.

Coming into this decision, markets were pricing in a little bit better than a 50-50 chance of a rate cut in September. That's the final meeting before the election. It'd be interesting to see if that comes down.

What's interesting is that Fed officials, you know, they've had weeks, if not months to debate this decision today. And it really may have all come down to just the last few hours. That's when the Fed officials got the latest inflation reading. And we learned that consumer prices, they didn't go up by as much as expected on a year over year basis. Prices didn't budge on a month over month basis.

[14:05:00]

So, that has kept alive the hope for rate cuts. But again, it's something that we're going to have to wait for, beneficial projecting one cut before the end of the year.

SANCHEZ: Matt Egan, thank you so much for that update. Let's bring in CNN's Catherine Rampell. She is a CNN Economics and Political commentator, also a columnist for the Washington Post.

Catherine, seven straight meetings without cutting interest rates, not exactly where investors hope that we would be. But it's not really the bleak picture that some had been predicting we'd see the economy in for years now.

CATHERINE RAMPELL, CNN ECONOMICS AND POLITICAL COMMENTATOR: Oh, absolutely. If you had talked to Wall Street analysts a year and a half ago, most of them or at least a healthy share of them were expecting a recession.

And part of the reason why the Fed has not cut rates despite expectations that they would, their own forecasts that they would is that the economy has been so strong that we have dodged a recession. That month after month after month, the jobs numbers come in better than expected.

Inflation is the other side of this coin. Inflation earlier this year had been coming in a little bit hotter than expected.

But as you and Matt, were just talking about, the numbers that came out today earlier this morning, suggested that maybe inflationary trends or disinflationary trends are back on track. And once again, we're seeing the Fed try to respond to that and figure

out where the economy is headed and how much stimulus or lack thereof it needs.

SANCHEZ: Catherine, what is it that causes these fluctuations in the consumer price index? It seems like some months, expectations are in one place, it comes somewhere else. And other months, expectations are in another place, it comes somewhere else. It's always dodging expectations, it seems like.

RAMPELL: Well, look, it's always -- forecasts are hard to make, especially about the future as the expression goes. So, it's always hard to get it exactly right.

I think what's interesting here is that most of the time, for the past year or so, when the numbers have come in differently than economist suspect -- have expected, they've come in a little bit hotter, they have shown the economy to be stronger. And with the exception of today, they have generally shown inflation numbers to be a little bit higher than had been expected.

And if you look at the Fed's projections that came out today, not only for when they expect interest rate cuts to happen, but also for other metrics about the economy, they actually now show that they think inflation is going to be a little bit higher this year and a little bit higher next year than they had once thought.

So, this is all kind of pointing more or less in the same direction, that the economy has been stronger, has been hotter. And that comes with good things and bad things.

The good things being that there a lot of jobs being added. The bad things being that if there's a really strong consumer demand as there has been, then that can manifest in higher prices if supply can't adequately adjust.

SANCHEZ: Yes, the future, obviously, is tough to predict. I'm wondering what you think of this prognostication of one rate cut before the end of the year?

SANCHEZ: Yes, it's been very interesting, again, to see the Fed's own forecasts change. They keep on shrinking the number of interest rate cuts that they are expecting in the near future, or at least putting off when they would begin.

And so, we saw today, of course, that they've now said, OK, maybe they'll only be one cut by the end of the year rather than two. If you had looked at their projections from a year ago, I think that they had anticipated more rate cuts than that.

And every time that they push back those rate cuts, or they say maybe we'll need fewer of them, maybe we'll need them later. That's again a reflection of the economy doing relatively well.

Of course, if you are someone who is sensitive to interest rates, you're trying to buy a house, for example, you're trying to buy a car and you need to borrow or you have -- you're carrying a balance from month-to-month on your credit card statements. That's quite painful for you.

So, you're being told the economy is great, doesn't need to see lower interest rates. But when it comes to your own pocketbook, of course, that can be painful, because you're hoping that the Fed is going to cut rates and you can refinance or you can get a -- you know, your mortgage for your first -- your new home that you're trying to buy at a lower rate and that hasn't been happening.

So, there are winners and losers when the economy is as strong as it has been.

SANCHEZ: Catherine Rampell, always appreciate the analysis. Thanks for being with us.

RAMPELL: Thank you.

SANCHEZ: Brianna.

KEILAR: Here in about two hours, the nation's top law enforcement official may be officially called out by Congress for not following the rules, for not fulfilling its subpoena request.

The House is expected to vote on whether to hold Attorney General Merrick Garland in contempt for not turning over audio of President Biden's interview with Special Counsel Robert Hur.

Republicans say they want the audio to confirm the transcript of the interview and make sure it is accurate.

(BEGIN VIDEO CLIP)

[14:10:06]

REP. JAMES COMER (R-KY): This is not just Republicans who need these recordings for their oversight duties. Media outlets, including the A.P., CBS, CNN, NBC and the Washington Post, among others, have filed suit to get the same audio recordings as well.

Because the media like everyone else knows there's no substitute for a recording of an interview.

(END VIDEO CLIP)

KEILAR: But the White House and Democrats say the House GOP wanted to, "distort for political purposes."

(BEGIN VIDEO CLIP)

REP. JERRY NADLER (D-NY): The only thing that has not been reduced is the recording itself. Something that in the wrong hands can be easily manipulated, that is not in idle concern.

Deep fakes and misleading the edited videos and recordings that proliferated in recent years. Last year witness testifying in a closed door deposition told us that she was the victim of a manipulated video made by a third party, but shared widely by the Republicans on the Judiciary Committee.

(END VIDEO CLIP)

KEILAR: Joining me now is Democratic Congresswoman Jasmine Crockett of Texas who is on the Oversight Committee. Congresswoman, thank you for taking time with us this afternoon.

In the rule vote to bring this contempt resolution up for a final vote, there were 16 members who didn't vote, that included 10 Republicans. Do you think there's any chance that those Republicans could buck their party and actually take final passage?

REP. JASMINE CROCKETT (D-TX): It's my hope that they find their courage and they do what's right, because what we've seen this entire 118 Congress is just a degradation of our institution.

From the inside, we are minimizing very serious things, such as the idea of holding the attorney general in contempt, considering the fact that he would technically be held in contempt by people that still have subpoenas outstanding that are years old at this point, and they could care less about honoring those subpoenas to show up and testify in front of the January 6th committee. We are talking about an attorney general that turned over tons of information.

And honestly, this is nothing more than a continuation of them trying to save face, because they failed to impeach the president of the United States, after the party of fiscal responsibility has spent over $20 million and reviewed over 3.8 million pages of documents and done over a hundred hours of testimony from witnesses.

It is time for them to get down to business because the American people are honestly sick and tired of being sick and tired. And when they lose their majority, it is going to be because they continue to not take our jobs seriously here on the Hill.

KEILAR: I mean, Congresswoman, we should note, CNN is among those who have sued for access to these recordings. The transcript, of course, is public, the audio is not, why shouldn't the audio be released?

CROCKETT: I think that has been made clear. We know that there is a real concern as it relates to alterations and fakes. Especially coming from this side.

We just heard from Donald Trump, how he basically wanted to signal to Russia and he said, hey, if you're listening Russia, right?

So, we know that there's a big concern about disinformation and misinformation. And we know that they continually perpetuate it.

And so, the only thing that they would want to do with this audio is to basically misconstrue and pretend as if what people are reading is actually not what happens. And that is a real concern.

If we had a party that lived up to being the ethical people that we were elected to be, then I don't think that there would be a big concern. But we know that they cannot be trusted with anything that can be manipulated.

KEILAR: So, if former President Trump had sat for a recorded interview with Robert Mueller or if he is reelected, and sits for a recorded interview in the future, that is not something that you would want released?

CROCKETT: I'm not saying that I can't tell you what's going to happen in the future. What I can tell you is that we're talking about an administration that has been completely transparent. I doubt that Trump would ever sit for anything voluntarily.

You know what, that's what this president did, though, he voluntarily did this. This may actually end up producing a chill on people participating in a very voluntary way, because you may end up in a situation such as this.

So, I think you would have to look at the totality of the circumstances to determine whether or not this is something that we would need, in addition to the fact we know that Robert Hur is not some Democratic stooge, we know that this is one of their guys, we know that he did everything that he could to go outside of his way to go ahead and make the case for it, I don't have enough to bring a case against the president of the United States.

But let me go ahead and throw what I would consider to be shade on the president of the United States as much as I can. And that did its own set of harm. People walked away from reading that report, and felt as if the president has some sort of diminished capacity of some sort.

[14:15:07]

But you know what, for anybody that is concerned that that may be a real thing. They will have an opportunity to see the president perform.

And not one, but two debates against the former president. And we can see how people feel about whether or not his capacity is all the way there.

KEILAR: I do want to ask you quickly about Hunter Biden's conviction on felony gun charges. The president said last week he will not pardon his son. The White House today, though, would not rule out a commutation, saying, he hadn't been sentenced yet. Should President Biden rule out a commutation?

CROCKETT: I don't think anything should be off the table. I think that his team should do any evaluation. And while I absolutely honor the verdicts that was rendered because I didn't sit there. I believe in the jury system.

KEILAR: Well, let me -- I need to ask -- I need to follow up with you on that. When Biden said he would respect the ruling, did it not seem reasonable to infer from that, that he would respect the sentence? CROCKETT: That part, I can't really tell you what the president was thinking at that time. I'm only speaking from my experience as criminal defense attorney.

KEILAR: I'm talking about inference. I know you're a criminal def -- you're a criminal defense attorney, let's talk about -- and you're also a politician. So, when you listen to a president say that they will respect the rule of law, they will respect the ruling, isn't it reasonable to infer that they would also respect the sentence?

CROCKETT: Not necessarily, not on the federal level. Here's the deal, and I don't think that it necessarily will be, "disrespect", because in the federal system, it's going to be the judge that is going to hand down the sentence. It's not going to be the jury.

The jury listens to the evidence, the jury decided guilt versus innocence. But as it relates to sentencing, that is not going to be up to the jury, this judge will hand down that sentence.

I don't know if this prosecutor is going to move for what we would call an upward departure. There's a lot of things that we don't know. And when you're looking at an upward departure from a sentence, usually it's because somebody has a history or whatever.

But we also know that this is yet another Trump appointed prosecutor. So, no, I don't think that it makes sense for him to necessarily say a point blank.

KEILAR: Kept on by the president.

CROCKETT: I'm sorry?

KEILAR: Kept on by the president.

CROCKETT: Correct, correct. But it was still a Trump appointee. And I would say that he was kept on by the administration, not necessarily the president himself.

But in addition to all of this, because we don't know the sentence, if they say gave him a hundred years. And that is an upward departure from what would be normal for anybody else and it doesn't really make sense, then I absolutely think that --

KEILAR: They definitely can't say that. I mean, the limit would be 25.

CROCKETT: No, but I'm saying --

KEILAR: We know that.

CROCKETT: No, no, no, but an upward departure means that you actually go outside of the limits. And what happens is, what a U.S. attorney does is they write a report so we can argue for a downward departure, where someone would actually get less than what is provided by law under certain circumstances. And then the prosecution can always write to actually get more. So, I can't say what will happen. And ultimately, the judge looks at

the memos that are prepared and decides whether or not he's going to stay within the limits or if he's going to go downward or if he's going to go upward on those limits.

So, I absolutely think that that should still be something that is on the table, depending on what happens.

KEILAR: Yes. No reason to expect that to happen. Again, this is a prosecutor kept on by President Biden clearly with his desire to do that.

Congresswoman Jasmine Crockett, we appreciate you being with us. Thank you so much.

CROCKETT: Absolutely.

KEILAR: Still ahead, Russian warship sailing less than 100 miles away from U.S. soil. Why they are in the area and how the U.S. military is responding.

Plus, eight foreign nationals with suspected ties to ISIS are arrested in three major U.S. cities. What investigators are saying about red flags that could have been missed here.

And one of the world's best known banana companies ordered to pay millions after being found liable for financing terrorism. We'll have that next.

(COMMERCIAL BREAK)

[14:23:42]

SANCHEZ: Today, shades of the Cold War in Havana Harbor. The Biden administration is closely tracking the arrival of Russian warships in Cuba. And here, you can see one of the Russian Navy's most modern ships, the Admiral Gorshkov arriving in Havana this morning, it was accompanied by a nuclear powered submarine.

The ships are expected to stay in Cuba for about five days marking the largest Russian show of force with their long standing ally in many years.

CNN's Patrick Altman joins us now live from Havana. Patrick, the U.S. is downplaying the site of Russian warships some 90 miles from American shores. They call it routine. How is this routine?

PATRICK ALTMAN, CNN CORRESPONDENT: It's not because I've lived in Cuba now for a long time. And yes, you have spy ships. Yes, you have other Navy ships that have come over the years. I've never seen anything like this site.

Here behind me, you know, 90 miles from U.S. and a couple hundred yards from me, you have a Russian nuclear powered submarine. You have another ship, which you mentioned, the Admiral Gorshkov, just on the other side of the pier, which is capable of firing hypersonic missiles. One of the most cutting edge ships that Vladimir Putin has in his arsenal. You have four Russian Navy ships now in the port of Havana. That's the largest convoy of ships we've seen here in many, many years.

[14:25:09]

And really, no one remembers that I've talked to a submarine coming in as this one has the Kazaam (ph) there as it did this morning. It could not be a more profile visit, it cannot be a more symbolic message of Vladimir Putin is sending to Washington, even if as the Cuban Defense Ministry claims that the nuclear weapons were left behind in Russia.

This is certainly raising the stakes of the U.S. military shadowed with planes in their own ships. These Russian navy vessels as they came into the port of Havana.

They'll be here for about five days and they will be letting Cubans tour some of these ships clearly trying to signal to Havana and the rest of the world that they are moving closer with their old Cold War -- old Cold War era ally.

Of course, the aid that the Soviet Union sent to Cuba over the years simply will not be coming. But there has been an increased amount of aid as Russia moves closer again with to Cuba.

SANCHEZ: Patrick Altman live from Havana. Thank you so much, Patrick.

Let's discuss more with CNN Global Affairs Analyst Kimberly Dozier.

Kim, obviously, the timing of this is notable because it comes as Vladimir Putin is responding to President Biden endorsing Ukrainian attacks inside Russia. So, what message should the White House take from this?

KIMBERLY DOZIER, CNN GLOBAL AFFAIRS ANALYST: Well, Putin had said that Russia would respond with asymmetric actions, asymmetric meaning not a direct military attack of any sort, but just military operations and activity to undermine U.S. influence.

And so, by sending these ships, which is something Russia has done since 2008 occasionally to the Cuban ports, and also signaling that it's going to practice with local military. It's saying that there are consequences for supporting Ukraine's against the Russian invasion.

KEILAR: What a sight these pictures that we're getting there from earlier today in Havana. I wonder, is there any sort of idea of what Cuba's thinking here, Kim, what did they get out of increased military cooperation with Russia?

DOZIER: Well, you know, in the rest of the world, beyond the Western nations that are supporting the sanctions against Ukraine, Russia is often seen as the underdog in this fight that, "Had to respond to NATO expansion."

So, as much as this is a message to Washington, this is a message to all of those countries that back Russia, or are sympathetic to the Russian point of view, saying that, you know, you've seen the U.S. meddling in our backyard, now we're meddling in theirs.

And the fact of the matter is, just a couple of weeks ago, I was in Estonia watching NATO exercises of Estonian and British and other forces practicing how to repel a possible Russian attack. And Estonia is right there on Russia's border.

So, this is a little bit of a tit for tat.

SANCHEZ: And notably, Kim, this also comes as the Biden administration has taken steps to relax sanctions on Cuba, to also to remove Cuba from a list of countries that don't fully cooperate with the United States on counterterrorism efforts. What do you think the Biden administration gained from those moves?

DOZIER: Well, the Biden administration is obviously trying to undermine Russian influence in Russian market control of Cuba by loosening those sanctions and signaling that Cuba could have a warmer relationship with Washington if it wanted.

So, you could also see this as Moscow signaling to its Cuban allies, don't you even think about it. Remember, you're on our side, and it's our military and our dollars that have been -- well, rubles that have been holding you up for so many decades.

KEILAR: Yes. Very interesting time and pictures that we're seeing here.

Kim Dozier, thank you as always, we appreciate it.

DOZIER: Thanks.

KEILAR: Still ahead, new details about the operation to detain eight men living in the U.S. with suspected ties to ISIS. How investigators tracked them down after they had already it across the border.

(COMMERCIAL BREAK)