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Trump to Sign Laken Riley Act Into Law; WH Says Federal Aid Freeze Still in Effect; Fed Leaves Interest Rates Steady, Despite Trump Demands. Aired 2-2:30p ET

Aired January 29, 2025 - 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 HOST: The Federal Reserve is set to announce its decision on interest rates imminently. Will the independent agency fly in the face of President Trump's repeated calls for rate cuts?

Also, just moments from now, the President is set to sign the Laken Riley Act, the first piece of legislation of his second term, one that has major implications for the administration's immigration crackdown.

JESSICA DEAN, CNN HOST: And the President's nominee for Health Secretary is under the microscope. Robert F. Kennedy, Jr. telling lawmakers he is not anti-vaccine despite an extensive record of linking inoculations to autism in children.

Also, we're going to have much more on this breaking news. The White House Budget Office sending out a new memo saying it's now rescinding the pause on federal aid and of course had prompted a lot of chaos and confusion. Well, there's more of that.

Now, the White House is saying it's not a recession. So what's going on here and what happens next? There are a lot of questions about this. We're following these major developing stories and many more all coming in right here to CNN News Central.

SANCHEZ: We begin this hour with the breaking news. The Federal Reserve announcing its decision on interest rates.

DEAN: CNN's Matt Egan is standing by. Matt, the Fed will not be changing rates this time.

MATT EGAN, CNN REPORTER: That's right. No change in interest rates. The Fed deciding unanimously to hit pause on interest rate cuts. This follows three straight cuts last year. Now, this decision was widely expected. It was well telegraphed by officials at the Fed and it's exactly what investors had been anticipating.

Now, the Fed is essentially in a holding pattern. Officials are waiting for more information before they decide when or whether or not they'll be able to resume interest rate cuts. We didn't get many clues from the Fed statement that was released just moments ago. The Fed did make some changes about how they're describing the economy. They inserted some new language that says that the unemployment rate has stabilized at, quote, a low level in recent months. And they're describing labor market conditions as solid.

They also removed some language that had previously described some progress on the inflation front towards the Fed's 2% goal. I think all of this does help explain why the Fed is pausing. They need to see more progress on inflation before they can cut further, and they don't feel like they need to be in a rush to rescue the jobs market.

Now, I'm sure this is going to come as a disappointment to some borrowers out there. The fact the Fed is pausing doesn't help anyone who's trying to chip away at credit card debt. It doesn't help people who are trying to get a mortgage or a car loan right now. Because, yes, rates do remain high.

I don't think this is going to sit all that well with the White House. President Trump has made clear that he wants to see interest rates come down even further. Of course, the President does not call shots on interest rates. The Fed does. I think this decision today makes that clear. Of course, this does set up a potential clash between Trump and Fed Chairman Jerome Powell, who, of course, was nominated by the President himself back in 2017.

Later this hour, we're going to hear from Jerome Powell. He's going to face some questions about why the Fed decided to pause and also what he's thinking about as far as potential changes in policy from this administration, including around tariffs. We're going to be looking for any clues from Powell about what it's going to take to get the Fed out of this holding pattern and back to cutting interest rates. Back to you.

DEAN: All right. Matt Egan with the very latest on that. Thank you very much. Let's turn now to Mark Zandi, Chief Economist from Moody's. Mark, thanks for being here with us. Let's just start first with what this expected decision signals about the state of the economy.

MARK ZANDI, MOODY'S CHIEF ECONOMIST: It's good. The job market in particular is strong.

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We got a lot of jobs in the month of December. So coming into 2025, we're in a pretty good spot. Unemployment, 4%. You know, we've been there for three years. 4%, very consistent with the estimates of the economy's full employment, unemployment rate. So all good there.

So economy feels pretty good. And, you know, I think given that, that's one reason why the Fed feels like it can pause here and not cut rates further, particularly in the context of the somewhat persistently high inflation still above their target, and I think increasingly just the uncertainty created by economic policy.

It's really unclear what President Trump has in mind with regard to the tariffs and deportations and tax policy. Until they get some clarity there, until that settles a little bit, I think they're going to be reluctant to change policy, cut interest rates or raise interest rates. They're just going to sit on their hands.

SANCHEZ: To that point, Mark, how do Trump's plans to put tariffs on goods coming from some of America's biggest trading partners? Tariffs looming on Mexico and Canada supposedly on February 1st. How does all that factor into this? Why does the Fed exercise caution when seeing that potential policy on the horizon?

ZANDI: Yeah, it matters a lot, Boris. I mean, in fact, you can go back and look at the minutes from the meeting that the Fed had six weeks ago. And in those minutes, it was clear that Fed officials are concerned about this. They don't know what to do and how to respond because they really need some clarity with regard to what the policy will actually be. But, you know, tariffs and deportations really complicate things for the Fed because both those things, higher tariffs and mass deportation, that raises inflation.

So, you know, all else being equal, you look at that, you say, hey, I should be raising interest rates, right? But higher tariffs and mass deportation, that hurts growth. So that says, oh, I should lower interest rates. So the Fed is kind of caught in between and really doesn't know what it should do. And so we get some clarity around all of it. And the result is what we're getting no change in interest rates.

And you know, Boris, the unfortunate thing is they're still high. I mean, the credit card rates, 23%, 24%, the 30 year fixed rate mortgage, well over 7%. Auto loan rates remain elevated. So, you know, for the average American, rates are still pretty high. And it's not good news that the Fed has to, you know, stays stuck where it is in anticipation of what the President and the administration has in mind on economic policy.

DEAN: Yeah, well, more to come on this. This is just the latest chapter in this book. Matt Egan and Mark Zandi our thanks to both of you. We really appreciate it.

ZANDI: Take care.

SANCHEZ: Scheduled to come this hour. President Trump will sign the Laken Riley Act, enacting the first bill of his new administration into law. It's of course, named for the 22-year-old Georgia nursing student who was killed on campus last year while she was out for a run. An undocumented migrant from Venezuela was convicted and sentenced to life without parole, igniting a national debate over immigration and crime.

DEAN: This legislation requires the Department of Homeland Security to detain undocumented immigrants accused of theft and violent crimes. Priscilla Alvarez and Elliot Williams both joining us now. But let's go first to CNN's Kaitlan Collins, who is in the room for this event. Kaitlan, of course, the first legislation he'll be signing into law. What can we expect?

KAITLAN COLLINS, CNN ANCHOR & CHIEF WHITE HOUSE CORRESPONDENT: Yeah, this is the first time we've seen a major bill signing by President Trump since he entered the White House just over a week ago. There's a lot of lawmakers, I can tell you, gathered here in the East Room where I am, where the signing is going to take place. There's a small signing table placed on the stage behind me.

And you've seen a lot of the lawmakers in this room who are either worked on this bill and led the legislation over on Capitol Hill or voted for it. That means Republicans and there are even some Democrats here in the room. I should note, Alabama Senator Katie Britt is in one of the front rows.

So is Democratic Senator John Fetterman of Pennsylvania. He's here as well and pushed for that and voted for it. Because this was a bill that, as it moved and made its way through Capitol Hill, really did earn bipartisan support from lawmakers on both sides of the aisle who ended up supporting it. And now, we'll see Trump come and sign it in the name of that slain Georgia nursing student that Boris just mentioned there.

But of course, there's a lot of moving parts here at the White House today. I should note that we just got that memo that was released by the Office of Management and Budget that seem to be rescinding the memo that was issued late Monday night, rescinding all or freezing all federal funding, trillions of dollars in grants to a lot of programs across the country, which caused a bit of an outcry, or I shouldn't say a bit of an outcry, just an outright outcry from a lot of state officials and people who run organizations asking how they would be impacted by that.

The press secretary just put out a statement saying that it is not a rescinding -- that they are not rescinding all of the federal funding freeze overall. So still a lot of questions to come about what exactly rescinding that memo means and what it means going forward, as we're seeing even lawmakers on Capitol Hill express some confusion about that.

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And I should also note that there are senators in this room who are in that hearing this morning with Robert F. Kennedy, Jr. questioning him amid questions about what his confirmation is going to look like next on Capitol Hill.

SANCHEZ: A lot to stay tuned for in that room as President Trump signs the Laken Riley Act into law. Kaitlan, please stand by for us. Let's go to Priscilla. Now, Priscilla, break down what the act actually does because there was some concern from lawmakers, critics who said that it was very far reaching.

PRISCILLA ALVAREZ, CNN CORRESPONDENT: Well, there is the top line of this and then there's some of the under the radar provisions. So the top line here is that it allows the detention of undocumented immigrants, or rather requires if they have been charged, arrested with or convicted of crimes. Now, that has been -- the provision that has been most talked about when talking about this measure. But there was some of the under the radar ones.

And that includes specifically, as you see there, state attorneys general may sue in federal court over decisions made by the federal government about releasing certain immigrants from detention. That essentially gives the states a lot more authority in dictating immigration enforcement. Not only that, but they can also move to have the State Department put up sanctions or visa restrictions on the countries who are not taking their repatriated citizens.

So all of this to say that this measure is actually quite wide ranging and could have wide implications. And that is why some Democrats received pushback from immigrant advocates, because as you heard there from Kaitlan, this did get bipartisan support because there is so much more, as you sift through the text here, that this bill does.

Now, in addition to all of this, though, Boris and Jessica, there are warnings by Immigration and Customs Enforcement officials to lawmakers telling them that they will not be able to carry out this law if they don't get millions more in funding. They have been historically underfunded and they just don't have the resources to do what this law says in requiring the detention of all of these undocumented immigrants.

So behind the scenes, there have also been conversations with, with ICE officials and lawmakers just because there aren't enough resources in place to carry out this measure, even with this measure and all of its implications.

DEAN: All right. Priscilla, thank you so much. Stay with us. I want to go to Elliot Williams, who's also with us, to kind of talk about more of the legal aspect of all of this. Of course, Elliot, this is coming after the President's immigration crackdown continues all across the United States. So it certainly fits within that portfolio.

Walk us through, legally, what this means. And look, it is named after Laken Riley, this horrific story of this young woman who was brutally murdered, Will it actually be able to stop something like that from happening again?

ELLIOT WILLIAMS, CNN LEGAL ANALYST: Well, it's hard to say that any law will stop anything from happening in the future. A challenge that Congress often has is they're solving yesterday's problem, not tomorrow's. Now, certainly, would this have prevented the circumstances of Laken Riley's death? Of course. Now, it's hard to know how many others there will be in the future.

Now, legally, how this will work is ultimately, it brings more people to the attention of Immigration and Customs Enforcement, people who are unlawfully present in the country. Despite the concerns that some Democrats raised about the bill, the simple fact is it does bring more people to ICE's attention.

But to Priscilla's point, that becomes a resources issue for the Department of Homeland Security. If you have a huge influx of people being brought to ICE's custody or attention, they're going to have to put them somewhere, they're going to have to detain them, they're going to have to put them in beds or ultimately put them on planes. Those all cost money. And I don't think there's been a clear answer yet as to how that's all going to work out as this plays out over the coming months.

SANCHEZ: Another aspect of the bill that is yet to be ironed out, as you said, Elliot, is the fact that it empowers states Attorney General -- attorneys general or other officials within states to sue the federal government for perceived harm that's created by decisions -- immigration decisions, that those state officials don't like. Something as simple as processing a visa, allowing a visa, is that constitutional? Because some lawmakers were essentially saying that it's not.

WILLIAMS: That's a really important question, Boris. Look, I worked at ICE for five years, as you know, Boris, we grappled with a lot of these questions, a lot. What is the role of the states in immigration enforcement? And there are some programs where the states and the federal government do work together or state authorities are deputized to work on immigration enforcement.

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But anytime you start increasing the powers that states have, you start raising yellow, if not red flags around the Constitution. If it can be seen or argued that this bill empowers the states to be enforcing or carrying out immigration law, then you have a potential constitutional challenge.

DEAN: And we are watching right now as President Trump walks out there as he prepares to sign this first bill into law in his second time in office. So while we're keeping an eye on that, Elliot, I do want to ask you to just continuing down what you were talking about. What about racial profiling? Is that a risk here?

WILLIAMS: It's always a risk. And in particular, one of the concerns that was raised about the bill by Democrats was that merely being charged with a crime is sufficient to get on ISIS radar here. Now, the counterargument, and I think it's entirely a fair one --

SANCHEZ: Elliot, sorry to interrupt, Elliot. We want to go ahead and listen to President Trump now at the podium in the White House.

(BEGIN VIDEO CLIP)

DONALD TRUMP, 45TH & 47TH U.S. PRESIDENT: The American people gave us a clear mandate to save our country. And we won all seven swing states by large margins. Historic. Very importantly, we won the popular vote by millions and millions of votes. Also, all 50 states, as you know, shifted toward the Republican Party. And that's never happened before. All 50. Every single one of them.

In our first week in office, we set records, taking over 350 executive actions. That's not been done before. And it has reportedly been the single most effective opening week of any presidency in history. And we want to keep it that way. We want to keep it going.

We want to keep it going. We've broken from decades of failed Washington policies and restored common sense and sanity to our government. We've unleashed American energy and we've already achieved record low illegal immigration. As you see, there's nobody trying to get in. And that's what we've been waiting for a long time. And gotten WOKE ideologies out of our government and out of our military.

The water has now begun flowing in California as we continue to increase the flow in coming days. Nobody's seen anything like that. And I've also taken strong action to regain control of the Washington bureaucracy, just for clarification purposes, because it was incorrectly reported yesterday. We have informed the federal workforce, which they've looked to do for many years, that if they're working for the federal government, they must show up to the office on time and on schedule. We don't want them --

--we don't want them to work from home because as everyone knows, most of the time they're not working, they're not very productive, and it's unfair to the millions of people in the United States who are in fact working hard from job sites and not from their home.

As federal employees, they must meet a high standard. They're representing our government, they're representing our country. If they don't agree by February 6th to show up back to work in their office, they will be terminated. And we will therefore be downscaling our government, which is something that the last 10 presidents have tried very hard to do but failed.

Most of the people we're talking about have not been going to their federal offices in many, many years from even before COVID but they have nevertheless been paid. Some have worked, some haven't worked, and most of the studies say that some have just gone through the motions.

We may ask these people to prove that they didn't have another job during their so called employment with the United States of America, because if they did, that would be unlawful. As you understand, a lot of people are getting paychecks, but they're actually working other jobs. So they'll have to prove that to us that they weren't.

In any event, we're requiring them to show up to work or be terminated. We think a very substantial number of people will not show up to work and therefore our government will get smaller and more efficient. And that's what we've been looking to do for many, many decades, frankly.

Thank you. In addition, there was a short-term pause or funding freeze on certain discretionary spending payments such as government grants, only for us to quickly look at the scams, dishonesty, waste and abuse that's taken place in our government for too long.

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As was explicitly stated, this in no way affected Social Security, Medicare, Medicaid or other entitlements that Americans depend on.

I've made abundantly clear from the very first day that I ran from office. That was a long time ago now, that's 2015. If you think about it, I announced in 2015 and we won in 2016. We did very well in 2020, but we did really well just recently. And I'm restating right now to correct any confusion that the media has purposely and somehow for whatever reason created Social Security, Medicare, Medicaid, have not been affected by any action we're taking in any way, shape or form.

We are merely looking at parts of the big bureaucracy where there has been tremendous waste and fraud and abuse. In that process, we identified and stopped $50 million being sent to Gaza to buy condoms for Hamas. 50 million. And you know what's happened to them? They've used them as a method of making bombs. How about that?

We stopped an attempt to make an illicit payment for illegal alien resettlement. We canceled $181 million in DEI training contracts. This is just for the training of people in DEI which has been terminated and completely terminated. And we paused $1.7 billion in unauthorized payments to foreign organizations, including stopping more than $40 million that was on its way out the door to the very corrupt World Health Organization which has not done its job and not done it properly. We also --

--we also blocked $45 million for diversity scholarships in Burma. 45, that's a lot of money for diversity scholarships in Burma. You can imagine where that money went. These were the types of payments and many others. I could stand here all day and tell you things that we found and we have to find them quickly because we want the money to flow to proper places.

But these were the payments and types of payments affected by the temporary freeze. And the American people strongly support these efforts. I talked about it during the campaign and they voted for us in record numbers. Every single day we're now putting America first and fighting to get the most out of every single tax dollar for our great citizens. We've given gathered this afternoon to take another historic action, however.

In a few moments, the Laken Riley Act will become the very first bill that I proudly sign into law as the 47th President of the United States. Laken was a brilliant, beautiful 22-year-old nursing student from Georgia. The best in her class. She was always the best. They would say, Laken, how do you do this and what do you do? They were always asking her questions.

She was respected by everybody. Even her teachers, they respected her so much. From the time she was in first grade, Laken knew she wanted to spend her time caring for others. That's what she did. To her friends and classmates, she was a light of warmth and kindness in every single room. To her parents and family, she was everything in the world.

They had a miserable period of time. Just after 9 a.m. last February 22nd, Laken went out for a jog on the campus of the University of Georgia. But she was just never returned. She never came back, did she? Parents are here, sister. All of her relatives. While on her run, Laken was attacked, viciously assaulted, beaten, brutalized and murdered by an illegal alien gang member who was set loose into our country by the last administration.

We are deeply honored to be joined today by Laken's parents, Allyson and John, and her sister Lauren. Thank you very much. Thank you. So sad we were together right after that happened. And it's a tremendous tribute to your daughter what's taking place today. That's all I can say. But so sad we have to be doing it at all. Thank you very much for being here.

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To Laken's family, we will keep Laken's memory alive in our hearts forever. Everyone's hearts. With today's action, her name will also live forever in the laws of our country. And this is a very important law. This is something that has brought Democrats and Republicans together. That's not easy to do. Laken did it. Laken did it. America will never, ever forget Laken Hope Riley.

The vicious criminal who murdered precious Laken, was an illegal alien member of the barbaric Venezuelan prison gang known as Tren de Aragua. He trespassed across our southern border in 2022 and was apprehended by Border Patrol. But under the cruel policies of the last administration, instead of being deported as he should have been, he was released into the United States as were millions of other people, many of them very dangerous people.

And you see what we're doing? We're getting the hell out of here. He was soon arrested again in New York City on charges of endangering a child. But because of New York City's deadly sanctuary policies, as we have in California and many other places, which we're ending, we're going to end them, he was released again to reoffend.

The Biden administration then provided this illegal alien criminal with a free taxpayer funded flight from New York to Georgia where he was arrested yet again, constantly. This time for stealing from a Walmart along with his gang member brother, who was a bad one. Only after being released a third time by the U.S. law enforcement did this cold blooded criminal go out in that fateful morning hunting for women on whom to prey.

That's what he did. He hunted. He hunted. It was like a hunter. I'm going to show him who the hunter is. This horrific atrocity should never have been allowed to happen. And as President, I'm fighting every single day to ensure that such a tragedy never happens again. We don't want this to happen.

And under the law -- thank you. Under the law I'm signing today, the Department of Homeland Security will be required to detain all illegal aliens who have been arrested for theft, burglary, larceny, shoplifting, assaulting a police officer, murder, or any crime that results in death or serious injury.

In addition, for the first time ever, this act gives state governments the ability to sue the federal government for immediate injunctive relief if any future administration ever again refuses to enforce the immigration laws of the United States. Like happened for four long years.

And that was happening for four long years. Frightful years. Amazing. You'd say, how can people do this? How can they allow this to happen? How can they allow criminals to pour into our country and then try and defend it? And they're still trying to defend it, but they can't. That's why I'm here instead of somebody else, actually. It's the biggest reason. I believe it's the single biggest reason.

Inflation was horrible. Many things were horrible during that administration. When you look at what took place in Afghanistan, the way they got out, not that they got out, but the way so many things were horrible. But to me, this was the worst of all. It's a landmark law that we're doing today. It's going to save countless innocent American lives.

I want to thank every House Republican, every Senate Republican, as well as the 12 Senate Democrats and the 48 House Democrats who voted to pass this vitally important bill. And many of them are with us today. And I really do appreciate it.

And I very much especially appreciate the bipartisan support. The Democrats, really, a big percentage of them came through. And plenty of them wanted to. They probably felt they couldn't, but they really wanted to. That they don't understand that would have made them a lot more popular, would have made them a lot better with their people.

The ones that didn't are going to be -- they're going to be sorry because the people are not going to forget that they wouldn't sign. This is a perfect, incredible tribute to an unbelievable young lady.

We're joined today by many great supporters of our new strong border policies, and they are indeed strong, including Vice President Vance. Thank you, J.D. The Secretary, Scott Bessent, who just got approved, by the way. Where's Scott? He just got approved. Scott, I'm very impressed.

Got a lot of Democrat votes. He got a lot of Democrat votes. That's great. I don't know, is that a good --

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