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Inflation Jumps in January; Trump and Musk Defend DOGE; Martin De Luca is Interviewed about Fogel's Release; Rep. Pete Sessions (R- TX) is Interviewed about DOGE; Hegseth Rules Out NATO Membership for Ukraine. Aired 9-9:30a ET

Aired February 12, 2025 - 09:00   ET

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

[09:00:00]

SARA SIDNER, CNN ANCHOR: Now you've joined this lawsuit because you - you truly believe this is something that goes against American principles.

Thank you so much for coming on, talking us through this. And we will check back in with you to see how things go and - and kind of what you're hearing from your parishioners as well.

Reverend Sean Rowe, thank you. I appreciate your time this morning.

A new hour of CNN NEWS CENTRAL starts right now.

JOHN BERMAN, CNN ANCHOR: All right, breaking just a short time ago, inflation heating up. More than expected. The wrong direction. Hitting a mark not seen since June. Stock futures have been diving.

We are pushing this morning to get information about how the U.S. won the release of American teacher Marc Fogel from Russia. So far officials being tight lipped on who will be exchanged.

And then 150 million mixed breed dogs in the world. Nearly half the dogs in the U.S. are mutts. But not one of them able to compete for the title at the Westminster Dog Show. So, given that reduced, slanted field. How special is it that a giant schnauzer wins best in show?

I'm John Berman, with Sara Sidner and Kate Bolduan. This is CNN NEWS CENTRAL.

All right, you are looking at live pictures of stock futures going down. Why? Because the breaking news just moments ago, the first inflation report we have seen for 2025. And it's not good. Heading in the wrong direction.

Let's get right to CNN's Matt Egan.

I was digging through this. I could find almost nothing good here.

MATT EGAN, CNN REPORTER: Yes, John, it's really hard to find anything good here. This was a setback, a significant one, and one that we were not expecting. So, the big number here is 3 percent. That's the annual inflation rate for January. That is the highest level since June. That was not expected to happen. The monthly rate also ticked higher. That is not what you want.

Digging in, core, which excludes food and energy, both of those figures also went the wrong direction. So, why is this happening? Well, there's a number of different drivers here. Everything from hotels, airfare went higher.

Eggs. Egg prices were actually a significant part of this as well. We know that bird flu is a massive problem. There's an egg shortage. So, we saw that egg prices went up by 15 percent month over month. That is the most that we've seen on a monthly basis since June of 2015. And look at that, on an annual basis, the last 12 months, 53 percent increase for egg prices. That is really very significant.

Now, when we look at the trend here for inflation, the problem is that the progress has really stalled out here, right? Now, the goal is 2 percent inflation. We are now at 3 percent. You see, there's been a lot of improvement from that inflation crisis of three years ago. We had 9 percent inflation. We're not there right now, thankfully. But it is ticking higher, right? That is the exact wrong direction that you want to see. And that is why we've seen such a negative reaction.

I mean the moment that this number came out, we saw stock futures fall significantly. I think a last look around 400, 450 point drop for the Dow. And we saw bond yields go higher. You could see that right there. S&P futures, 1.1 percent lower, 1.2 percent for the Nasdaq. So, this was not the number that the market wanted to see. And, obviously, it is not the number that viewers want to see either.

BERMAN: Yes. Again, part of the issue there was this was a surprise. I think everyone was a little surprised it was as bad as it was. And it wasn't just - everyone knows egg prices are going up. When you strip that out, and things are still not good.

Look, how is the president responding to this?

EGAN: Well, you know, it's interesting. About a half hour before this report came out, President Trump went on social media and he did put out a post where he was saying that "interest rates should be lowered and that this is something that should happen. He said interest rates should be lowered, something which would go hand in hand with upcoming tariffs. Let's rock and roll, America." That post did not age well, John, because 32 minutes later we saw interest rates in the market go significantly higher because the market is getting increasingly concerned about inflation and less confident that the Fed is going to be able to start cutting short term Fed interest rates anytime soon.

So again, when you look at the cost of living, and this was a number one issue for many voters. This has been a long-standing problem. A lot of people were hoping for more progress. And we may get more progress in the coming months.

BERMAN: Sure.

EGAN: But right now, clearly the year on the inflation front is starting off on a negative note.

BERMAN: And it presents a policy challenge because a lot of the things the president wants to do are inflationary, you know, so it just - which he may want to counter with other measures, but it does put that pressure on him politically.

[09:05:06]

EGAN: It does.

BERMAN: All right, Matt Egan, interesting news of the morning. Thanks for explaining it so well.

EGAN: Thanks, John.

BERMAN: Sara.

SIDNER: All right, in an Oval Office appearance unlike anything we've ever seen before, President Trump's billionaire friend, Elon Musk, standing over the commander in chief at the Resolute Desk, promising transparency as DOGE slashes agencies and reshapes the government. But critics say the so-called transparency is nonexistent. Musk saying his ultimate goal is to restore democracy. He admitted he has already made some mistakes and even not told the truth. But he says he's fully expected to be scrutinized nonstop, and that scrutiny has been intense, especially now that Musk has alleged he found a lot of fraud but offered so far no evidence to back up those claims.

(BEGIN VIDEO CLIP)

ELON MUSK, : We are find - we do find it sort of rather odd that, you know, there are - there are quite a few people in - in the bureaucracy who have a - ostensibly a salary of a few hundred thousand dollars, but somehow managed to accrue tens of millions of dollars in net worth while they are in that position.

(END VIDEO CLIP)

SIDNER: All right, CNN's Alayna Treene is at the White House.

Tell us more about this messaging from Elon Musk. It was interesting, you've noted this, he was doing a lot of the talking and sort of holding court while the president is sitting at the desk just kind of looking at him or looking at his son and, you know, letting him go wild.

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: Right. And we never saw - we never saw President Donald Trump stand up at all. He just sat there quiet and really permitted Elon Musk to take questions for roughly 30 minutes or so. Notable, of course, because this was the first time we really heard from Musk directly, certainly at length, ever since not only the election, but also since he kind of took on this purview of trying to hunt down waste, fraud and abuse within the government.

But look, I think a lot of this, Sara, was about the skepticism and the criticism that all corners of Washington are kind of aiming at Musk and DOGE right now from Capitol Hill, to the courts, really challenging the influence Musk has, the power that he has, and some of the actions that they are doing.

And I do want to note, you know, people were saying this seemed like it was a spur of the moment thing, that Musk was there for this executive order, you know, signing that the president did. But this wasn't that. I was told on Monday by a White House official that they were planning to have Musk be there to take questions and really try to cut away at some of the, you know, uncertainty and mystique that has been surrounding Musk and DOGE this whole time.

But, Sara, one of the most interesting parts of this was when he started to talk about transparency. He said, quote, "transparency is what builds trust," and went on to insist that what DOGE is doing and what - and what Musk is doing himself is all public, that they're putting in on their website.

Take a listen to how he framed it.

(BEGIN VIDEO CLIP)

ELON MUSK, HEAD OF DOGE: All of our actions we - are maximally transparent. In fact, I don't think there's been - I don't know of a case where an organization has been more transparent than the DOGE organization.

(END VIDEO CLIP)

TREENE: Now, Sara, as you mentioned, a lot of critics are saying, well, actually, they're not transparent at all. And many people who have been working in these different agencies, who have been impacted by some of what DOGE was doing. One, we're learning the media, from them, about what's happening. But a lot of them also have questions about, you know, where am I going to get paid? Am I being laid off? I know within the White House, and among Trump administration officials as well, a lot of people don't really know what has been going on with them. So, a key question, of course, moving forward is, what will this transparency actually look like and what sort of accountability is there going to be for someone like Musk, who, again, is an unelected official?

Sara.

SIDNER: Alayna Treene, thank you so much. A lot to report there from that - what would the word be called, unusual situation there in the White House.

Kate.

KATE BOLDUAN, CNN ANCHOR: The breaking news overnight, American Marc Fogel is back on U.S. soil. And this morning, he is heading to Texas to be reunited with his family and also begin the government's re- acclimation program, which we have seen in the past.

Fogel was, you could tell, clearly overwhelmed and overcome by emotion as he returned home. President Trump welcomed him home last night and also to the White House more than three years after - after more than three years of wrongful detention in Russia.

(BEGIN VIDEO CLIP)

MARC FOGEL, AMERICAN FREED FROM WRONGFUL DETENTION IN RUSSIA: This super organism of people that came to my support and the love that I was given sustained - sustained me for three and a half years.

(END VIDEO CLIP)

BOLDUAN: This morning we are also standing by to learn more about another American, the White House says, the president says, will be released today, and also learn more about the details of this deal, how they were able to get Marc Fogel home.

[09:10:06]

Just moments ago, the White House official who flew to Moscow yesterday to bring Fogel home, told us this.

(BEGIN VIDEO CLIP)

STEVE WITKOFF, SPECIAL ENVOY FOR THE MIDDLE EAST, NEGOTIATED RELEASE OF MARC FOGEL: We had some reach out several days ago. People approached us, me and - me, in this case, and said that there might be an opportunity to get Marc Fogel out. I talked to the president, his national security advisor, his chief of staff, Susie Wiles, and John Ratcliffe, and the president directed me to go over there and completed if we could.

(END VIDEO CLIP)

BOLDUAN: And joining us right now is U.S. counsel for Marc Fogel, Martin De Luca.

Martin, thank you so much for coming in.

A fantastic morning to be waking up as Marc Fogel, for his family and for you. I mean, congratulations and just being able to see this come to fruition.

He seemed so overwhelmed last night. How is he doing? Is there anything more you can tell us about his reaction and how he's feeling?

MARTIN DE LUCA, U.S. COUNSEL FOR MARC FOGEL: Well, thank you. Thank you for having me. And we are all overjoyed with the return.

What I can tell you about him is, we saw him late last night after he was with the president. He was in great spirits. But he's always been in - in high spirits, even throughout the three and a half years of detention. We had the ability to communicate with him from time to time, and every time he was optimistic.

He was, as you know, passed up in - in three prisoner swaps in the - in the Biden administration, which is unprecedented. And - and the last swap that he was passed up on, which was August 1st last year, when the Russians released Russian dissidents, green card holders and - and some Americans, but left, you know, Marc was left behind. He was - he was pretty devastated. And even after that, which is enduring a lot of psychological pain, he managed to not lose hope.

So, you can imagine that when they came in to the penal colony and pulled him out and drove him to Moscow, he didn't know what was happening, but - but he knew it was a good sign and - that we were getting very, very close. And then you could see yesterday, when he was with the president, how amazing his spirit, his personality, his character is, and how strong he was mentally to get through all of that.

BOLDUAN: The big question is, what are the terms of the deal that was able to bring Marc home? The Kremlin says that a Russian citizen is being released as part of the terms of the deal to secure Marc's release to bring him home. Do you know who it is?

DE LUCA: I am not really at liberty to - to discuss that. That's, I think, something for the White House to talk about.

What I can tell you is that we advocated really, really, really hard during the transition. What we understood from the dialog that was going on behind the scenes, and we worked with, you know, the Russian lawyers on this, Ipam (ph) and Dmitri Afanasyev (ph), who was incredible at helping to maintain a channel of communication, during a period of time when, you know, U.S.-Russia relations were - we're really difficult. But throughout that time what we were seeing was that the U.S. government was not necessarily prioritizing Marc's release, for a variety of reasons. And - and that had to change.

So, what's amazing about this is that for - for three years, over three years, Marc, despite bipartisan support in Congress, had not been designated wrongfully detained. The Biden administration had produced a number of excuses for why that couldn't happen. He didn't meet the criteria. We're relying on classified information. Blah, blah, blah, blah, blah. The facts are that the day after the election, the family received the official notification that Marc had been designated wrongfully detained. And that's when we realize the next two months of transition, not much is going to happen with this administration. And so, we started advocating really strongly and pushing the idea that Marc had been left behind in three swaps, inexplicably, honestly, that the tone was going to change, the conversation was going to change with President Trump, and that, you know, this was an opportunity, probably once in a hundred years, that - to improve U.S.-Russia relations and bring it back from the brink.

[09:15:07]

And so this would be a good reason to get the relationship started in a different way. And, you know, that somehow, and through various ways, it seems like the message was well received and - and the governments got talking to each other, right, in a constructive way. And the result, the first result of that, I think, is yesterday.

BOLDUAN: Martin De Luca, thank you for your time. Congratulations on being able to get Marc Fogel home. It's great to see an American brought back. Thank you very much. John.

BERMAN: All right, new this morning, the nominee for FBI director, Kash Patel, accused of lying under oath. Why one top Senate Democrat is now demanding an investigation.

And after eight months stranded in space, a new plan could finally bring home two NASA astronauts.

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[09:20:03]

BERMAN: All right, new this morning, Elon Musk says he and the Trump administration are being transparent when it comes to their sweeping actions to reshape the federal government. And that includes being transparent about himself. He says.

The white house.

Says that you will identify.

And excuse.

Yourself from any.

Conflicts of. Interest that you may have. Does that mean that you are, in effect, policing yourself?

Well, we actually are trying to be as transparent as possible. Well, all of our actions are fully public. Transparency is what builds trust, not simply somebody asserting trust.

BERMAN: All right, new this morning, Elon Musk says he and the Trump administration are being transparent when it comes to their sweeping actions to reshape the federal government. And that includes being transparent about himself, he says.

(BEGIN VIDEO CLIP)

REPORTER: The White House says that you will identify and excuse yourself from any conflicts of interest that you may have. Do that mean that you are, in effect, policing yourself?

ELON MUSK: Well, we actually are trying to be as transparent as possible.

Well, all of our actions are - are fully public.

Transparency is what builds trust, not simply somebody asserting trust.

(END VIDEO CLIP)

BERMAN: All right, with us now is Republican Congressman Pete Sessions of Texas. He is the co-chair of the Department of Government Efficiency Caucus, which is bipartisan, a little less so as Democrats are starting to leave it.

Congressman, nice to see you today.

You told CNN that you were going to be meeting with federal workers, and your message to them would be, quote, I might have done it differently when it comes to what Elon Musk and his teams have been doing. What would you do differently?

REP. PETE SESSIONS (R-TX): Well, thank you very much, and good morning.

The - the things which are - you, the American people, are seeing played out is data and information that are actually material to the facts of the case, which, by and large, Congress has not been a part of. Even the government at Treasury, the - the computer people were shocked at how quickly and - that the information became available as it was.

My point to the government workers is that we are going to see that there are a series of changes that have been made, and they were publicly highlighted. Those include five specific areas that the president indicated that the American people would see changes in. And those changes have now been dealt with or are being - being dealt with. Some in the courts and some straight up. And that I told them that I believe that the essential services that they provide are important to the American people, and that I believe that these workers that are back in Texas will find themselves working for an organization that would find itself at work, would be still face to face with the American people, and that I believe that they will be value added to working with the American people and important to this government.

BERMAN: You're an AT&T guy, which you often talk about, an old guy, old corporation that likes, you know, plans and whatnot. So, what I'm still trying to figure out is, when you are going to them to tell them that you would do things differently than Elon Musk, what is it that you would do differently?

SESSIONS: Well, we - we tend - I tend to want to be able to give them - people information ahead of time instead of them seeing it on social media. I tend to want to be able to say to people, which I think that - that the DOGE, the president did do, here are the specific areas in which we will have conflict.

But he - I - I'm not sure that we laid out in specificity where those might be and where they may be headed. So, what happened is, that the data and information that was gleaned from Treasury drove decision making.

Now, why the decision making necessarily quickly? Because we are up in Washington trying to make a determination by March the 14th what we're going to fund for the coming year. It would be inconceivable to me, and I did tell them this, for us to wait and let these matters to go on for another year before we fixed it.

So, they began vetting that process of what might be right or what might be wrong. And I think that Congress is - is appropriately now finding things that had not previously necessarily been disclosed to the general members of Congress.

So, while we want to be supportive, we're for continuing this process, including Mr. Musk's role in the government, the decision making that he contains and the need for them to continue to gain this information, and why the government did not want to provide that to him, which forced him, in my opinion, to come and gain these people who could literally, as was called, break into the computers. No, they are - they didn't break in, they did it under official authority, under people who were elected officials. And that's what they're doing.

But it - it is a little - it's not following necessarily the same prescriptive viewpoint that I might do or have become accustomed to from a corporate perspective.

BERMAN: Congressman, can you hang on one second, and stand by, because we are getting a little breaking news, and I do want your take on it.

[09:25:00]

It comes from Defense Secretary Pete Hegseth, who has now made some statements meeting with, I believe, NATO leaders about what he believes NATO and the U.S. role should be in Ukraine.

Natasha Bertrand is there.

Natasha, tell us what he said.

NATASHA BERTRAND, CNN NATIONAL SECURITY AND POLITICS CORRESPONDENT: Well, John, Secretary Hegseth, he did just give remarks before a meeting of the Ukraine Defense Contact Group here at NATO headquarters in Brussels. And he categorically said that the U.S. does not believe that NATO membership for Ukraine is a realistic outcome as part of any kind of negotiated settlement with Russia.

Now, these are extremely stark comments that stand really in direct contrast with the policy, of course, of the Biden administration. But take a listen to what he said just moments ago.

(BEGIN VIDEO CLIP)

PETE HEGSETH, DEFENSE SECRETARY: We want, like you, a sovereign and prosperous Ukraine. But we must start by recognizing that returning to Ukraine's pre-2014 borders is an unrealistic objective.

The United States does not believe that NATO membership for Ukraine is a realistic outcome of a negotiated settlement. Instead, any security guarantee must be backed by capable European and non-European troops.

(END VIDEO CLIP)

BERTRAND: So, Hegseth is essentially completely washing the United States' hands here of the conflict in Ukraine. He emphasized repeatedly throughout his remarks that the U.S., President Trump, believes that Europe has to take on the bulk of the burden here, not only in helping Ukraine in terms of defeating the Russians or pushing them back, but also being their own primary guarantor of their own security. The U.S. cannot lead on that anymore, he said, because the U.S. is facing its own internal threats coming from the southern border, and also has to shift more of its focus and its priorities towards deterring a war with China.

So, all of this to say, he did reiterate that the U.S. remains committed to NATO, remains committed to the European Union, and that partnership, but that the alliance itself has to step up, has to spend more, has to do more, and that they can no longer rely on the United States to play that leading role, that it really was playing and was a cornerstone of the previous administration's foreign policy. That is not going to fly anymore, he said.

BERMAN: All right, Natasha Bertrand for us in Brussels.

Natasha, thank you so much for that report.

Congressman Sessions, if you are still with us, the shift, one of the major shifts in policy here from the Biden administration and previous administrations had been this - this open-ended attitude to the idea of NATO membership for Ukraine. Secretary Hegseth seemed to close the door on that. What's your view?

SESSIONS: Well, in fact, I did hear him say that. But I also would say to you that during the remaining year, the last year of the Biden administration, the Israelis and the Ukrainians received, despite what I thought was support from Congress, a mixed signal from the United States. So, obviously, there are some things, not just within Donald Trump's mind, but within the relationships that we're having, that there is some bit of, OK, you're going to need to learn to stand on your own. You're going to need to see this as a European issue. You're going to need to be able to see that others are going to have to stand up around you.

And this is a change. This is a change from where America did, without question, stand behind what we consider to be a direction we wanted to go. Why? Because the long-term implications of policy and the - the - the putting together of the teams, the Europeans have always counted on. And so, this is a new way to look at it. I'll be very pleased to learn more about this, but that's the way I view it today.

BERMAN: All right, the Europeans have already played a huge role, obviously, in Ukraine to this point. We will see what this shift, what it means for Ukrainian efforts -

SESSIONS: With the United States.

BERMAN: Yes, absolutely. Absolutely.

SESSIONS: But that was with the United States, once again, standing in that corner. It now seems like we're going to expect Europe to - to determine more of its own future. And - and this is a change.

BERMAN: Well, we'll see what that means for the Ukrainian people trying to push the Russians out.

SESSIONS: Yes.

BERMAN: Congressman Pete Sessions, we do appreciate you sticking around today. Thank you.

Kate.

BOLDUAN: Illegal and authoritarian. That is what one San Francisco attorney is saying. Why San Francisco is now suing the Trump administration over immigration policies targeting sanctuary cities.

We'll be right back.

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