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Prominent Role of Pentagon Chief's Wife Draws Scrutiny; U.S. Markets Rebound After Treasury Secretary Calls Trade War Unsustainable; Pope Francis Now Lying in State in St. Peter's Basilica. Aired 7-7:30a ET

Aired April 23, 2025 - 07:00   ET

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

[07:00:00]

SARA SIDNER, CNN ANCHOR: Paranoia and chaos at the Pentagon. New CNN reporting this morning on Defense Secretary Pete Hegseth, some of his closest advisers now thinking about leaving as questions grow about the prominent role of his wife at the Pentagon.

JOHN BERMAN, CNN ANCHOR: Hashtag Trump chickened out. That phrase currently trending on Chinese social media, racking up more than 110 million views as President Trump signals a potential about-face on his trade war with China. This morning, U.S. markets seem to love it.

KATE BOLDUAN, CNN ANCHOR: And a dangerous wildfire is rapidly spreading through New Jersey. Evacuations are underway as parts of the Garden State Highway remains shut down.

Sara's off. Oh wait, she's not. I'm Kate Bolduan of John Berman and Sara Sidner. This is CNN News Central.

SIDNER: Breaking this morning, new CNN reporting on the chaos inside Defense Secretary Pete Hegseth's inner circle and the growing scrutiny on his wife, Jennifer Hegseth. This comes after reports she was included in a second Signal check where sources say her husband shared sensitive details of the military strike on Yemen.

A source tells CNN that Hegseth is so worried about potential leaks to the media, he is now in full paranoia back-against-the-wall mode. They say things have gotten so bad, close advisers are considering resigning. Those sources add that Hegseth up is now largely relying on a small core group of advisers, including his wife, a former Fox News producer. She has been a near constant presence at his side, and according to one source, she submitted paperwork for a security clearance. It's unclear if she received one.

Despite the turmoil at the Pentagon, Hegseth has remained defiant and the White House is publicly standing behind him. And while it appears unlikely President Trump will fire Hegseth, at this point, the president has been working the phones behind the scenes to get feedback about the defense secretary's performance. That is according to two people familiar with those actual conversations.

CNN's Natasha Bertrand, one of the reporters who broke all of these new details, is at the Pentagon with us. Let us start with these concerns over Pete Hegseth's wife who has asked -- there's been an ask for a security clearance for her. What else have you learned?

NATASHA BERTRAND, CNN NATIONAL SECURITY CORRESPONDENT: Yes. Sara, look, I mean, secretaries of defense of the past have leaned on their wives for advice and counsel, so that is not necessarily unique to Secretary of Defense Hegseth. But his wife has really taken on an outsized role as he has kind of tried to get his bearings in this job.

And so you saw that play out really in real time last weekend when it came out that his wife, Jennifer Hegseth, was part of the Signal chat in which Secretary Hegseth shared very sensitive details about a military operation against the Houthis. That was not an accident, and it was not a one-off. We are told that Jenny Hegseth has been present at several meetings that Secretary Hegseth has had with other officials here at the Pentagon, including one very high level meeting that he had with the British defense secretary earlier this year, John Healey, though, a Pentagon spokesperson, tells us that she was not there for any classified or sensitive discussions.

Now, one former official who spoke to CNN about this said, quote, I have never in my professional life seen a spouse sit in on a meeting with counterparts from other countries where they talk through substantive matters related to our relationship with these foreign militaries. And this actually dates back even to when he was going through the confirmation process on Capitol Hill. Jenny Hegseth was present at virtually every single meeting that Hegseth had with senators, and one Senate aide said she attended every single one of his meetings with Republican senators, which we're not aware of any nominee for any nominated position doing.

So, clearly, she's playing an outsized role here, and as you said, she has submitted paperwork to get a security clearance, but it's unclear if she has actually obtained one at this point, Sara.

SIDNER: I'm curious -- I know that you've learned some more information. I'm curious what you learned about how the turmoil there is impacting day-to-day workings at the Pentagon with all of this sort of going on and the chaos that has been created.

BERTRAND: Yes. So, there are a couple of examples of this that sources pointed out to us really that the White House has taken notice of in particular.

[07:05:04]

There was one incident early on in Hegseth's tenure when the White House was scrambling to get him to sign a memo related to the Golden Dome Missile Defense System that President Trump has been pushing here at the Pentagon. That apparently sat unsigned on Pete Hegseth's desk for about three weeks because the White House simply could not get a hold of him and his chief of staff to push that.

There was also another instance that really underscores how Secretary Hegseth has a very small inner circle, does not trust a lot of people, and is very, very paranoid and concerned about leaks. He -- earlier last month, he actually went directly to the head of the office of Special Access Programs here at the Pentagon instead of going through a normal policy process that included lawyers, for example, to ask whether Elon Musk could be read in on over two dozen special access programs, which are highly classified programs here at the Pentagon related to China.

Ultimately, when those DOD lawyers were looped in, they said, look, this is probably not a good idea, but sources told us that maybe that would've actually panned out if Secretary Hegseth had included more people and gone through a regular process. Sara?

SIDNER: I just want to go back to what you said about Pete Hegseth not being able to get a hold of him. The president could not get a hold of Pete Hegseth, the White House could not get a hold of him to sign documents? Did I hear that right?

BERTRAND: They were having trouble getting a hold in particular of his chief of staff, according to his now former chief of staff, we should say, according to multiple sources. They were trying to get him to sign this memo, and for some reason, it just sat unsigned on his desk for about three weeks. Ultimately, he did sign it. Sara?

SIDNER: All right. Natasha Bertrand, thank you so much for all your great reporting this morning. John?

BERMAN: All right. This morning, the phrase, Trump chickened out, is trending on Chinese social media. Now Wall Street futures are pointing up. They love this. This comes after huge gains yesterday. Investors and now apparently U.S. competitors are seeing signs that the president is backing off on a number of fronts, now saying he will not try to fire Fed Chair Jerome Powell and importantly saying that the tariffs against China will drop. They will be lowered. And this comes as Treasury Secretary Scott Bessent told investors that the U.S. tariff battle with China is unsustainable, again, sending signals there will be some kind of retreat there. We are standing by from new comments for Bessent this morning.

Let's get right to CNN Early Start Anchor and Business Correspondent Rahel Solomon. The markets seem to like this. The markets seem to be buying into the idea that the White House is backing off.

RAHEL SOLOMON, CNN BUSINESS ANCHOR AND CORRESPONDENT: Yes, John. The market's sort of breathing a collective sigh of relief, if you might, around the world, a woosah moment, if you might, for my fans of Bad Boys. So, global markets solidly higher. So, you look at Asia markets, they close higher, with the exception of Shanghai. European markets also solidly higher in U.S. futures, as you said, with just a few hours before the opening bell, also solidly higher between, let's call it 2 percent for Dow Futures to almost 3 percent for NASDAQ Futures. That's on top of the gains we saw yesterday.

So, there are a few things really driving market sentiment at this point, as you pointed out, John. So, one, you have those comments from the treasury secretary, Scott Bessent, that were leaked yesterday, where he essentially said, look, the standoff with China is unsustainable and that he expects a de-escalation. And then you had Trump himself, the president himself, back up those comments. Take a listen to what he said.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: I'm not going to say, oh, I'm going to play hardball with China. I'm going to play hardball with you, President Xi. No. We're going to be very nice. They're going to be very nice and we'll see what happens. But, ultimately, they have to make a deal, because otherwise they're not going to be able to deal in the United States.

(END VIDEO CLIP)

SOLOMON: The president also saying that the tariffs on China are substantially high, that they will come down substantially, won't be 0 percent, but perhaps it won't be 145 percent. So, markets like that.

And then the other really big thing here, John, that you pointed to is the president walking back, or at the very least softening his tone on firing the Federal Reserve chair, Jay Powell, now saying, saying yesterday that he had no intention of firing Jay Powell despite last week saying that his termination, Jay Powell's termination couldn't come soon enough.

And now we have this new reporting from our Kevin Liptak came out just moments ago that, apparently, that about-face actually came amid warnings from Trump's advisers, some of his top advisers, about the legal challenges to firing the chair, but also some of the financial turmoil that we witnessed.

So, the only caveat I would say, John, sort of moving forward is that this is sentiment, this is language. We could see a post later today. We could see another statement later today. That moves markets just again. So, investors aren't exactly popping the champagne but breathing a sigh of relief and watching really closely for what the treasury secretary says in about three hours,

BERMAN: Right? I mean, I think it is fair to say they saw deliberate signals, what they thought were deliberate signals yesterday on the Fed chair and on China, and that's why they're so happy this morning.

[07:10:04]

So, we'll see if that continues this morning.

Rahel Solomon, great to see you, thank you very much. Kate?

BOLDUAN: But, of course, as we've learned, right, that what is the reality today when it comes to this trade war is not necessarily reality tomorrow. So, we will stand by to stand by.

Breaking news overnight, the body of Pope Francis is now in St. Peter's Basilica where he will lie in state for three days. Huge crowds have already gathered to pay their respects. We will take you there live.

And Vice President J.D. Vance and the ultimatum, telling Russia and Ukraine, quote, it's time to say yes or America walks from the negotiations to end Russia's war on Ukraine. This is ahead of critical talks set to happen today.

And new details this morning also in the case of. The bag of the DHS secretary, Kristi Noem, the stolen bag, how it was taken, what was inside, and now the surveillance video of the thief.

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BOLDUAN: Happening right now, take a look at live pictures right there, the start of three days of public viewing for Pope Francis. Thousands of mourners have already come through, filed through St. Peter's Basilica to pay their respects. The pope's body is lying in state in an open, simplified coffin, just as he had requested inside the basilica, and will be there until his funeral on Saturday.

Earlier this morning, cardinals escorted Pope Francis' coffin from the residence through St. Peter's Square, and you, as you can see, before huge crowds gathered there to see it.

CNN's Ben Wedeman is in Rome. And, Ben, it seems that -- I mean, I'm just looking at some of this video right next to your shot of the huge crowds that gathered to see that procession this morning. What's going on?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, these are the biggest numbers we've seen since Monday when the announcement was made of Pope Francis' death. And what we're seeing is that thousands of people have been lining up, waiting to file through St. Peter's Basilica to see the body of Pope Francis, which was moved about four hours ago, a little less than four hours ago, from the chapel of the Casa Santa Marta, the Vatican guest house where Pope Francis lived and passed away at 7:35 in the morning local time on Monday.

Now, the doors of St. Peter's Basilica are going to be open today until midnight for those who would like to see his body, and they will be opening again tomorrow morning 7:00 A.M. local time, all the way through midnight until midnight Friday. And, of course, 10:00 A.M. on Saturday is when the funeral is going to take place.

Now, we had a chance to speak with several people who had been able to be among the first to file through St. Peter's Basilica, one, an 80- year-old woman from Los Angeles who had come here with the rest of her family to celebrate her 80th birthday. They were in St. Peter's Square on Sunday when the pope went around in the Pope Mobile. And they were, of course, here as well on Monday morning when they heard the news. So, this has been a very emotional trip for that family.

We also spoke to two priests, one from Guatemala, one from Colombia, who really stressed sort of the international focus of Pope Francis and bringing in the faithful from not just Europe, but South America, Africa, and elsewhere. So, many people paying tribute to Pope Francis here today. Kate?

BOLDUAN: Ben, great to have you there, thank you so much for coming on. Sara?

SIDNER: All right. New details for you this morning in Homeland Security Secretary Kristi Noemn's stolen purse case that, for some reason, have $3,000 in it. Coming up we have some surveillance footage of that crime. We'll talk through it.

Plus, fireworks in court as Karen Read's murder trial gets underway in Boston. She's accused of murdering her police officer boyfriend. The first witness has taken the stand. We'll have a live report.

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[07:20:00]

SIDNER: All right. This morning, we're learning more about the person whose Secret Service says stole DHS Secretary Kristi Noemn's handbag from a Washington D.C. restaurant. Investigators say the bag was loaded with about $3,000 bucks in cash and some other items.

CNN Security Correspondent Josh Campbell broke the story for us. Josh, what are we learning about how this all went down?

JOSH CAMPBELL, CNN SECURITY CORRESPONDENT: Well, you know, this is so concerning from a security perspective because you have one of the nation's top law enforcement officials herself falling victim to a crime. And as we're learning more details, it appears as though this was a sophisticated thief. We learned just yesterday that investigators have reviewed CCTV footage from inside the restaurant. They see this man come in as Kristi Noem and her family are sitting eating. He makes a pass through the restaurant and then eventually returns to a table next to hers and sits down sort of with his back to hers.

And then, eventually, as he's looking down at this very high end purse that's at her feet, he uses his left foot and slides it over to where he is. He looks around the restaurant a little bit more. He grabs a purse, tucks it under his jacket and he is gone. It wasn't until Secretary Noem actually stood up after dinner that she realized that this was missing. And, of course, that then resulted in the Secret Service investigation.

We're learning from sources that inside the bag, what she lost was her DHS access badge, there were $3,000 in cash, there was a Louis Vuitton wallet or passport or credit cards or house keys, a lot of items that were in there that this person was able to abscond with.

Now, our colleague, Kit Maher, at the White House actually caught up with Noem right after this happened. Have a listen.

(BEGIN VIDEO CLIP)

REPORTER: I know there's a large band. I wanted to ask about the theft of your bag last night. We heard -- was your bag stolen last night at dinner?

KRISTI NOEM, HOMELAND SECURITY SECRETARY: It was. REPORTER: Can you tell me any details about that?

NOEM: I don't think I can yet.

REPORTER: Okay. We've learned that it happened, but I just wanted to ask you about it and if you had any additional details. Has it been resolved?

NOEM: No, it hasn't.

(END VIDEO CLIP)

CAMPBELL: So, the investigation continues. We're told that one aspect that Secret Service investigators will be looking at is whether those credit cards are actually used. Of course, it's worth pointing out that as far as the cash, that large amount of cash that was inside her bag, a DHS spokesman said that Noem's large family was in town, several members, and she was going to use that money to spend on them for Easter activities as well as gifts.

[07:25:12]

But, of course, finally it's important to note that there are real questions about security here. You have a high profile person, a cabinet official, a thief, was able to get so close to her. This is obviously someone who's been very outspoken and is potentially at target. She's, you know, essentially taunted gangs and cartels as immigration officials have conducted these raids.

So, you know, oftentimes with these security details, maybe the protectee doesn't want to have a large security presence with them, but you can only imagine this could have been much worse had that thief had more sinister intentions.

SIDNER: Yes. I mean, there's so much to this. There's so much to why there's so much cash in the bag. There's so much to how this person got so close and was able to just slip the bag from off the floor and take it and go.

Josh Campbell, I know they're looking for him. Well, thank you so much for all of this. John?

BERMAN: All right. Quote, full paranoia, back-against-the wall-mode. New reporting on Defense Secretary Pete Hegseth's state of mind, and this morning, new questions about his wife's role at the Pentagon.

And evacuations underway after wildfires exploded overnight in New Jersey.

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