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Hegseth Under Scrutiny After Second Signal Group Chat Revealed; Hegseth Remains Defiant, Insists Fired Officials Leaked Information And Could Face Prosecution; Stocks Push Higher After Bloomberg Report That Bessent Told Investors Expects U.S.-China Trade War To De- Escalate; IMF: U.S. & Global Economies To Slow Sharply Due To Tariffs; Pope Francis' Funeral To Be Held Saturday In St. Peter's Square. Aired 1-1:30p ET

Aired April 22, 2025 - 13:00   ET

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

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[13:00:55]

BRIANNA KEILAR, CNN ANCHOR: Defiant Defense Secretary Pete Hegseth downplaying the latest signal chat controversy and lashing out at fired Pentagon officials. Hegseth doubling down on accusations that those officials were leaking to the press. We expect to hear from the White House Press Secretary just minutes from now.

BORIS SANCHEZ, CNN ANCHOR: Plus, a debate over the future of the Catholic Church. The death of Pope Francis forcing a tough conversation about what is next for the Vatican. As they prepare for funeral arrangements, cardinals are facing a monumental task, choosing who will become the next pope.

And the markets on track to see their worst April since the Great Depression, as economists are sounding the alarm over President Trump's trade war and its consequences for the global economy. We're following these major developing stories and many more all coming in right here to CNN News Central.

Today, a secretary on the defense and an economy on the ropes. We're standing by for a response from the White House as we're following two major headlines today. The International Monetary Fund warning that President Trump's unpredictable trade war will, quote, "significantly slow U.S. and global economies this year".

That comes as Trump's sweeping tariffs and growing tensions with the Federal Reserve is rattling Wall Street. The Dow is now on track for its worst April since the Great Depression.

And then there's the turmoil at the Pentagon. Not only is Defense Secretary Pete Hegseth under scrutiny for sharing detailed military plans in yet another Signal group chat that included his wife and brother. In this case, he's also facing a series of scathing rebukes from some of his former top advisers about his judgment in leadership.

This morning, Hegseth went on the attack against those ousted officials and accused them of leaking. (BEGIN VIDEOCLIP)

BRIAN KILMEADE, FOX AND FRIENDS CO-HOST: You believe this came out, they said it was called team huddle because -- so one of the people who work for you, one of the three who no longer are there, leaked this out as a way to get back at you?

PETE HEGSETH, DEFENSE SECRETARY: That's right, Brian. When you dismiss people who you believe are leaking classified information and again, the investigation is ongoing and that will take time. And if when the evidence produced, it will go to DOJ. Why would it surprise anybody, Brian, if those very same people keep leaking to the very same reporters, whatever information they think they can have to try to sabotage the agenda of the president or the secretary.

So once a leaker, always a leaker, often a leaker. And so we looked for leakers because we take it very seriously and we will do the investigation. And if those people are exonerated, fantastic.

(END VIDEOCLIP)

KEILAR: Let's go down to CNN's Jeff Zeleny, who is at the White House for us. And Jeff, the White House has denied reports that Trump is looking to replace Hegseth. What are you learning?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Brianna, at least publicly, the President is standing behind his defense secretary. Of course, he expended significant political capital to get him confirmed in the first place by just a one vote margin. So, yes, the White House is standing by him.

However, that does not mean that there is not a concern and really a growing sense of angst about what is going on at the Pentagon. And those are some of the things we hear sort of behind the scenes here. So we will see how this develops. So the President has the support of Pete Hegseth.

But again and again in that interview this morning, it was so interesting. The Defense Secretary was trying to blame some of his very loyal workers who he has dismissed. But all of them were part of the Trump MAGA movement, if you will. So it's a little bit sort of interesting to see.

The buck does not stop with the Defense Secretary. He was placing the blame on many others. But there's no doubt that questions about the Defense Secretary and how this whole group chat came to a light will be front and center of the White House briefing, which is starting this hour, as well as you mentioned earlier questions about the economy as well.

The President has been basically laying off social media a little bit more than yesterday, not talking about the chairman of the Federal Reserve, which really rattled the markets yesterday. But there is no doubt there is deep concern about the financial markets here as the President nears his 100th day in office.

[13:05:09]

This is certainly not something that he had planned that the markets would be viewing his second term in office in such a dark way. Brianna?

KEILAR: Jeff Zeleny live for us at the White House.

Let's play a little more now from Secretary Hegseth's interview on Fox this morning.

(BEGIN VIDEOCLIP)

HEGSETH: There are a lot of ways to communicate in this building. I do it every day. I was just doing it this morning. Official channels by which we communicate classified information. If you want to do it and do it the right way, you should. If we think you are leaking to the press, that's a very real problem.

KILMEADE: Right.

HEGSETH: We take that very seriously at the Pentagon. I'm here to do one job.

KILMEADE: Not you.

HEGSETH: One job for the President and the American people -- secure the country. America first, peace through strength. I don't have time for leakers.

(END VIDEOCLIP)

KEILAR: CNN Chief National Security Correspondent Alex Marquardt is here. Obviously questions about how he has handled information, but he doesn't seem in command of this moment. Is this tenable?

ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: He was defensive there. He goes on to blame the deep state. I mean, they're going to keep getting questions. We'll see those questions put to the press secretary this hour.

President Trump holding firm yesterday, talking about disgruntled employees. But we have now the former Press Secretary John Ullyot writing in an op-ed about the full blown meltdown, as he put it at the Pentagon, and warning that there are more shoes that are going to drop. So this problem could get work worse for Pete Hegseth.

There are essentially two sets of problems here. And, of course, they converge. You have first the Signalgate, as it's become known. It is one thing to put these very sensitive, probably classified attack plans against the Houthis on a Signal chain with the top national security officials in the country.

Still probably not appropriate, but at least those are people who have security clearances. But to do it on a second channel with people who clearly don't have what's known as a need to know, like his brother or his personal lawyer, both of whom work at the Pentagon, but his wife, who doesn't have an official role, that's really quite remarkable.

And then there is this general chaos at the Pentagon and these leaks that he is accusing the deep state of fomenting this unrest. But the people who are being fired and removed from their positions because of these leaks are people who are closest to him, several of whom have -- were brought in by him.

Now, Hegseth doesn't necessarily have widespread support. Remember, Brianna, he was confirmed in the Senate by a tie-breaking vote that was cast by the Vice President. He does not have universal support among Republicans, let alone any real support among Democrats.

So I think the President for now, standing firm, loathe to cave as he would see it to some good reporting by journalists. But certainly this drumbeat, this chorus is getting louder. And we all know that even Donald Trump has a tipping point.

KEILAR: That's right. We'll have to see where it is.

Alex, thank you so much for that. Boris?

SANCHEZ: Pivoting now to the economic volatility we've seen over the last few weeks. Today, the Dow is seeing a pretty big surge. It's up roughly 2.5 percentage points. The Dow jumped happening after Bloomberg reported that Treasury Secretary Scott Bessent told investors behind closed doors that he expects the United States trade war with China to de-escalate.

Joining us now is Nick Timiraos, he's a national economics correspondent at The Wall Street Journal. Nick, thanks so much for being with us. I have to ask you about those comments from the Treasury Secretary. Do you have any idea on what they're founded on? Because our reporting indicates that the administration reached out to Beijing and said that President Xi should request a call with Trump. Our understanding is that call yet -- has not yet come.

NICK TIMIRAOS, NATIONAL ECONOMICS CORRESPONDENT, THE WALL STREET JOURNAL: Well, and Bessent didn't say that the U.S. is talking to China. He simply, you know, according to what's been reported, repeated comments he made publicly last week, these tariffs on China are so high that they are a tax that's not going to be paid. They're going to destroy demand and we can't maintain it for that long. So I think that's what you see markets reacting to right now.

SANCHEZ: I have to ask you about the Dow being headed, despite today's historic gains, for the worst April since the Great Depression. I mean, there's a lot of factors here. There's China, there are pending deals with essentially almost every nation on earth, and then there's Trump's attacks on Fed Chair Jerome Powell. Which do you see is weighing most heavily on Wall Street right now?

TIMIRAOS: Well, I think it starts and ends with the trade war. And the reason for that is if you go back to the April 2nd Liberation Day announcements, the optimism on Wall Street was that everybody was going to know now what the rules of the road were going to be for trade. If you're a business, you are not going to put in a multi-billion dollar investment in the United States if you don't know what your cost of goods are going to be. And we still don't have that clarity. So the tariffs on China, today we have the Treasury Secretary saying they'll come down.

[13:10:02]

We still have this 90-day pause on the other tariffs with 60 other countries. People don't know what the future is going to look like, and so that freezes up activity.

SANCHEZ: Some of that uncertainty leads to gold being at an all-time high, and the dollar weakening as well. Do you think the Treasury Secretary, the Commerce Secretary, are seeing those as red flags and advising the President that some kind of off-ramp is needed?

TIMIRAOS: That they have to be concerned here. If you go back and look at what Secretary Bessent said a couple of months ago, he said the administration was not going to talk about the Fed. They were going to focus on the 10-year Treasury yield.

And that's important because your mortgage rate, your auto loan rate, it depends on those longer term interest rates. But if you look at the 10-year Treasury rate, it is up over the past few weeks. So that measure of success is going in the wrong way for the administration, and I think it has to concern senior economic policymakers.

SANCHEZ: You wrote in the journal that Trump is essentially laying the ground to blame Fed Chair Jerome Powell for any kind of economic weakening. What happens if Powell gets fired? And what happens if he says, all right, let's lower interest rates? Would that solve some of this problem?

TIMIRAOS: Lowering interest rates here isn't going to deal with not knowing what your cost of goods are going to be, having to pay a large tariff on a freight container that's getting off the boat in Long Beach, California. So it's not clear what lower interest rates do here.

If the President were to try to sack the Fed Chair, I think you'd see a huge legal fight, and you know, the market would have a verdict probably before the Supreme Court could get together. And you've been seeing that in the markets in the last couple of days, Boris.

SANCHEZ: We've seen major announcements from a number of U.S. companies talking about either temporarily or possibly permanently installing layoffs and laying people off. I wonder how you think the tariffs are impacting the jobs market.

TIMIRAOS: Well, you don't see a lot of layoff announcements yet. Today, you have the CEO of Verizon saying, we are going to pass these costs on to consumers. And so I think that's the big question right now, is which do you see first? Do you see prices go up, or do you see companies say, you know what, we're going to have to let people go because this is eating into our margins, this is going to hit our bottom line.

SANCHEZ: Nick Timiraos of The Wall Street Journal, thank you so much for sharing your perspective with us. Appreciate it.

TIMIRAOS: Thanks for having me.

SANCHEZ: Still plenty more news to come this afternoon. The Vatican sharing the Pope's last words. You'll hear his final message.

Plus, the Education Secretary defending the administration's escalating battle with Harvard after more than 100 colleges and universities accused the White House of unprecedented government overreach.

And opening statements in the murder retrial of Karen Read. Remember, she's accused of killing her police officer boyfriend. Her attorneys claim that she's the victim of a police cover up. The details just minutes away. Don't go anywhere.

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[13:17:21]

SANCHEZ: Catholic faithful from around the world are gathering at the Vatican in mourning as they prepare to pay their final respects to Pope Francis. Right now, the pontiff's body is lying in rest in the chapel of his papal residence. Tomorrow, he's going to be moved to St. Peter's Basilica for public viewing ahead of his funeral scheduled for Saturday.

As Catholics reflect on Francis's life and impact around the world, cardinals will soon begin the secretive process of deciding which among them will be next to lead the church.

CNN's Ben Wedeman is live for us just outside of St. Peter's Square in Rome. And Ben, we're learning more about the Pope's final message. Walk us through that reporting.

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, this is coming from, Boris, the Vatican press office who are citing Massimiliano Strappetti, who was the personal health assistant to Pope Francis since 2022, who was by his side during those entire 38 difficult days when he was in hospital suffering from double pneumonia.

According to the Vatican, on Easter Sunday, the day before yesterday, Strappetti took the Pope along the route to the balcony over in St. Peter's Basilica, overlooking the square after where he delivered a brief message to the approximately 50,000 people in the Square who were there for the Easter service.

Afterwards, apparently the Pope asked him, do you think I can go out into the Square? He wanted to make, according to the Vatican's statement, one last meaningful surprise to the 50,000 faithful who were down below. And that's what he did. He drove around. He was driven around in the Pope mobile around St. Peter's Square as we've seen so many times before. But many people who were there did note that he looked very tired, very frail, perhaps even more frail than when he came out of the hospital just two weeks before that.

Now, when he got back, apparently he was very happy, but tired from the ordeal. And he told Strappetti, thank you for bringing me back to the square. And then, of course, he went back to his quarters in the Casa Santa Marta. And there, apparently, during the night, his health began to deteriorate.

According to the statement, he made one final gesture of farewell to Massimiliano Strappetti. And then he died what they described as a discreet death, almost sudden, without long suffering or public alarm, which is clearly how Pope Francis wanted to go.

[13:20:18]

He didn't want himself to be the subject of this. He's always served and not wanted to be the center of attention. But we did speak with one Sri Lankan priest who actually met Pope Francis, and this is what he told us.

(BEGIN VIDEOCLIP)

UNIDENTIFIED MALE: We were able to meet Pope, and while shaking hands, you know, when I touched Pope Francis, my whole body, there was a kind of a vibration. You know, I really felt that the power of the Holy Spirit in Pope Francis.

(END VIDEOCLIP)

WEDEMAN: And really, other people we've spoken to here in this square, who might not have had the honor, the opportunity to meet Pope Francis, also told us that they were touched by his 12 years as pontiff. Boris?

SANCHEZ: Ben Wedeman, live for us in Rome. Thank you so much.

Brianna?

KEILAR: For more on all of this, we're joined now by Dr. Tim O'Malley. He's a professor of theology at Notre Dame University. Professor, what are you watching for here in this lead up to the conclave at such a pivotal time for the church?

DR. TIM O'MALLEY, THEOLOGY PROFESSOR, NOTRE DAME UNIVERSITY: You know, it's interesting. It's actually Easter week for us. So there's a kind of joyousness in most of our churches and our lives. And so there's a lot of energy just in general on campus in celebration of Easter. And of course, you know, we're here at Notre Dame, we're thinking about his legacy and about how that legacy will continue with whoever is chosen as the next pope.

KEILAR: Yes, and I think we should note, and a lot of people I'm sure do not know, that Francis appointed four-fifths of the cardinals who will be choosing the next pope, right? So they are not agnostic, perhaps on the approach that they prefer in the next pope.

But we should also note there's a vocal minority in the church that opposed Francis's approach, including here in the U.S., which may be hoping for a more conservative result out of this conclave. How do you think it's going to go?

O'MALLEY: Yes, I mean, I really don't know. I think one of the things that the church always says is you go into the, you know, you go into the consistory for the papal election, and you come out as a potential pope, you leave as a cardinal. And so, you know, I think it really depends, right?

Pope Francis has appointed all the cardinals. But of course, the cardinals are represented for various reasons, not just sort of that they are in agreement with everything that the Pope Francis thinks about the life of the church or thought about the life of the church, but of their own sort of willingness to be faithful to the church wherever they live.

And so, I think it's really going to be up for grabs on who comes next. And, you know, we'll pray for that. I mean, we have to first -- we as Catholics are going to first pray for his funeral. And then, you know, of course, by the second week of May, we'll be talking about the next pope.

KEILAR: Yes. And I don't want to get too far ahead of that, because I know that at this point in time, obviously, there's so much reflection on what he has meant for the church. And that is sort of a prism through which I think many people are looking to see what the next steps are.

As you are hearing from some students, and I know it is Easter week, but what are you hearing?

O'MALLEY: Yes, I mean, our students just got back, actually, yesterday. So there was no class yesterday. And so today is actually the first full day of classes. And of course, you know, they're excited, they're prayerful about what comes next.

Our own Basilica has an image of Pope Francis, of which students are, of course, praying for him, for his legacy. And so, you know, I think our students are excited about the future of the church, wherever that's calling the church. There's a lot of hope.

I suppose that's the kind of faith that Christians have in the end is that he is dead, but his death is not the end. His death is the -- is a new beginning. And so, there is a recognition of that, a kind of joyful hope that he has gone to meet his own maker, and that now he dwells there forever.

So that's the kind of energy I know, right, in the next week or two. We're going to have lots of lectures on campus and talks about the future of the papacy and what it means that this is really going to become a focal point. But I think that our community right now is really engaged in prayerful reflection on Pope Francis.

[13:25:05]

KEILAR: Yes, certainly is. And we appreciate you taking the time to speak with us about him. Professor Tim O'Malley, thank you.

O'MALLEY: Thank you so much for having me on.

KEILAR: Certainly.

And next back to one of our top stories, extraordinary claims of chaos at the Pentagon as Defense Secretary Pete Hegseth confirms the existence of a second Signal group chat that included members of his family. At least one Republican lawmaker is calling for Hegseth to resign. But will others follow suit?

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SANCHEZ: We are just now hearing for the first time from White House Press Secretary Karoline Leavitt answering questions from reporters about Defense Secretary Pete Hegseth. Moments ago, she was asked about the latest Signal group chat controversy --