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U.S. Markets Open after GDP Report; Diane Swonk is Interviewed about the GDP Report; Questions over Measles; New York High School Hazing. Aired 9:30-10a ET

Aired April 30, 2025 - 09:30   ET

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

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[09:30:53]

KATE BOLDUAN, CNN ANCHOR: All right, opening bell just ringing, just ringing on Wall Street.

CNN's Zain Asher here with me now.

And the market has yet another day of a lot to digest as we begin.

ZAIN ASHER, CNN ANCHOR AND BUSINESS CORRESPONDENT: Yes, trying to digest this first quarter GDP report.

BOLDUAN: Exactly.

ASHER: What's interesting is that an hour ago with futures, when the first quarter GDP came out, we actually did see futures slipping. If you look at where the Dow is right now, down about three quarters of 1 percent, you know, clearly there is a slight selloff, but this is not a significant selloff.

BOLDUAN: Yes.

ASHER: There are a couple of things that the markets are looking at. I mean they're not pleased with the headline number by any stretch of the imagination. We're talking about 0.3 percent in terms of contraction. This is the worst quarter we've seen since 2022. And by the way, significantly slower just in terms of economic activity compared to what we saw in the fourth quarter of last year.

BOLDUAN: Yes. Yes.

ASHER: However, and this is really important to note, when you see a number like that, Kate, the headline doesn't look great. However - and, obviously, the optics aren't great either. But it doesn't necessarily indicate this time around a significant slowdown in economic activity. And that is because imports were really weighing on this number.

BOLDUAN: Yes.

ASHER: What this is indicative of is front loading. You and I talked about this with retail sales, right? This idea that companies and consumers essentially were trying to be smart, rushing out and saying, listen, we're going to get ahead of these tariffs.

BOLDUAN: They didn't know what was coming. They knew something was coming.

ASHER: Right.

BOLDUAN: Right.

ASHER: So - so first quarter GDP covers January, February, March. March wasn't the worst of the tariffs in terms of what was announced, but we got steel and aluminum tariffs being announced. We saw Mexico, Canada, tariffs against them. Sort of back and forth with Mexico and Canada. And people were really rushing out saying, we're going to get ahead of these tariffs. We're going to go out and purchase and import goods. And imports are a bit of a drag when it comes to GDP.

I think that, you know, obviously this number is skewed, but in terms of what is really going to move markets this week is going to be the jobs report on Friday. That's going to be the real piece of hard data because that covers April. And what happened in April, Kate?

BOLDUAN: Liberation day, Zain. Liberation day.

ASHER: Liberation day. That's when we got literally the worst of the tariffs, including the 145 percent tariff announced on China. And so if in April you then see evidence that companies are now no longer hiring at the rate that they would have been, that companies are no longer investing at the rate that they would have been had these tariffs in April not been announced, then that is, obviously, problematic in terms of economic growth, if that continues.

BOLDUAN: Yes, there's more through line, more - more clarity on exactly how to read the numbers.

ASHER: Right.

BOLDUAN: Markets are open. So begins the day.

ASHER: So begins the day, Kate.

BOLDUAN: Good to see you, Zain. Thank you.

John.

JOHN BERMAN, CNN ANCHOR: All right, with us now is Diane Swonk, chief economist at KPMG.

Thank you so much for being with us.

GDP down 0.3 percent. The first contraction since 2022. Another economic report out this morning showed that core prices actually increased more than expected. So, when you see growth going down and prices going up, what does that spell for you? DIANE SWONK, CHIEF ECONOMIST, KPMG: Well, it is a problem. There is, I

think, this quarter is sort of an anomaly for exactly the reasons said. We saw a lot of front running of tariffs. We saw inventories balloon at their fastest pace since early 2022. That's when we were still restocking in the wake of the pandemic. This was front running tariffs.

In fact, investment spending on information technology, which are in the crosshairs of tariffs, that increased more than a stunning 69 percent annualized pace in the first quarter. That is just, you know, hard to believe, but that's going to borrow from growth going forward. And we also saw in today's ADP report a much slower gain of job gains.

Now, that doesn't necessarily predict what we'll see in the official report on Friday. But one thing that was really important in that report was where the declines were. They were in small businesses. Those are businesses that really have the least amount of margins to be able to deal with tariffs. And that's one of the things we're very concerned about going forward is that we could see red ink in the employment data as we get into May and June.

BERMAN: Yes, you're talking about the ADP report there, which said there were 62,000 jobs added in April after 147,000 were added in March. So, a pretty sharp decline there. And the expectation had been for 134.

[09:35:02]

So, take the ADP report. Take the GDP. Take core prices. What kind of soup, or a cocktail, does this make right now?

SWONK: Well, sadly, what it makes is for something the Federal Reserve is quite worried about, and that is stagflation. We are worried that we are going to slip into a recession as we get into the summer and through the end of the year, and the Fed will not be able to cut rates as rapidly as it would like. In fact, it will be on the sidelines because of the stagflationary nature of terrorists. It has to wait through the tariff-induced inflation to see how bad it is, and for it to come off before it can actually begin stimulating the economy.

This is very different than what we saw a few years ago when the Fed was raising rates to fight inflation. We had a cushion of savings back then. We don't have that now. When you see the stock market down and the U.S. economy dependent so much on the top 10 percent of households, accounting for almost half of all consumer spending games, really horrible inequality that also takes out that support for spending.

BERMAN: Yes. I want to read you just the very top of a statement that President Trump put out shortly after the GDP numbers came out. He's talking about the stock market. But one might presume that he was also referencing the GDP numbers. He goes, "this is Biden's stock market, not Trump's. I didn't take over until January 20th." And then he goes on to say tariffs won't kick in for some time here.

He did not take over until January 20th, although, you know, two plus months of the first quarter he was the president, and the last quarter of growth under President Biden was 2.4 percent.

My question to you is, how much of what we're seeing in these economic numbers now are a result of policy decisions?

SWONK: What we're seeing is a lot of result of policy decisions. The front running of tariffs is the front running of tariffs. We know that not only did imports soar and shaved about 5 percent alone off of GDP growth in the first quarter, ending up, many of them, in inventories and spending, like I mentioned, in the information technology space. But we also know that that has a payback to it as we go forward. And as those inventories are depleted, we know that already shipments between the U.S. and China, particularly from China to the U.S., have almost come to a standstill.

BERMAN: Yes, and, again, and markets continue to dip this morning after the opening bell in reaction, I think, to these GDP numbers.

Diane Swonk, thank you so much for being with us this morning. Appreciate it.

Sara.

SIDNER: All right, from food dyes to fewer health care workers, how are Trump's policies reshaping your child's health? Doctor Sanjay Gupta has the answers, up next.

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[09:42:12]

BERMAN: All right, this morning, the World Health Organization is warning that measles risk is high as a multistate outbreak in the United States reaches 781 cases. The outbreak accounts for about 83 percent of the 941 total measles cases that have been reported in the U.S. this year. That's according to a CNN tally.

So, you sent us your questions on vaccinations. With us to answer them, CNN chief medical correspondent Dr. Sanjay Gupta.

Sanjay, great to see you.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Good morning.

BERMAN: Riggan - Riggan from Bentonville, Arkansas, writes, "are there any studies that look at the total load of all recommended childhood vaccines?"

GUPTA: Yes. So, this is a - this is an important question. And the short answer is, yes. But let me explain that a little bit.

First of all, this idea that when you give vaccines, you're giving what are known as antigens, something that will stimulate your body to make antibodies. A lot of people are familiar with antibodies. The question for a lot of people has been, given that we're giving more vaccines than we did in the past, is the antigenic load, which is what Riggan's talking about, much higher, or, you know, have there been studies on this to compare it to years past? And this may surprise people because despite the fact that we have more diseases for which we can vaccinate against nowadays, the antigenic load is different. I'm going to show you the numbers here in a second. But keep in mind, vaccine technology is improved, so you can purify the proteins, for example, in a virus to cause that - that antibody response better than we could 30, 40, 50 years ago.

So, take a look here. We used to vaccinate against eight or nine diseases and the overall antigenic load was around 3,000. This is in the '80s and '90s. And now it's closer to 14 diseases that we vaccinate against and the antigenic load is a fraction of that.

So, I get it, people get worried, am I giving my kid too many shots, all that. I understand that. But that antigenic load that Riggin's talking about is the thing to really pay attention to.

BERMAN: Yes, and it's substantially less than it was several years ago.

GUPTA: Substantially lower.

BERMAN: I didn't know that.

All right, Sanjay, Jordan from New Jersey asks, "I have a three month old baby, our first. Is it safe for us to travel nationally with regards to measles? Why can't we vaccinate earlier?"

GUPTA: Well, with regard to the first part of the question, I think you do have to sort of keep tabs on where measles is spreading robustly. We know west Texas, and that area of the country, so that if people are concerned, if they have immune compromise or they haven't been vaccinated, those are areas probably to be a little bit more concerned about.

With regard to vaccinating early. I think here's the way to think about it. Two things. There is a time when your body is ready to generate antibodies in response to an antigen, in response to a vaccine. Three months, they say, for measles is too young. You can go as early as six months, which is still earlier than the typically 12 to 15 months. So, you'd wait - you'd wait a few months, I think, still for this child, this baby to get vaccinated.

[09:45:03]

The good news is that as a result of having - being so young, she probably has maternal antibodies if mom has antibodies to measles. So, there should be some maternal antibodies that protect that young child.

BERMAN: All right, Keith from Minnesota asks, "is it possible to reverse a child's type two diabetes, or is it a life long management issue?"

GUPTA: Yes, no, this - great question. It is possible to reverse. And this is a really important point. Type one diabetes - these are general rules - but type one diabetes tends to be more genetic, tends to be something you were born with. Type two, as a general rule, tends to be something that is more a result of lifestyle changes.

John, you know, 25 years ago, when I started doing this sort of work, type two diabetes was typically something you just saw in adults. So they'd call it adult onset diabetes. But now, as a result of, you know, the obesity epidemic and other things, we're seeing type two diabetes in children, sometimes even young kids. But the answer to the question is, yes, it is possible to reverse. You lose weight. Your insulin starts to work better. Make those lifestyle changes. And at least with type two diabetes, you can make a significant impact.

BERMAN: Worth trying to manage that.

Sanjay Gupta, always great to see you. Thank you for all this outstanding information.

Kate.

BOLDUAN: Ahead for us, an alleged hazing incident turned into a possible kidnaping case. Now a New York DA says 11 high schoolers have 48 hours to surrender or face felony charges.

We'll be right back.

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[09:52:10]

SIDNER: This morning, a New York district attorney is warning at least 11 high school students in Syracuse, turn yourself in or face much more serious charges. It stems from an alleged hazing incident. He said the victims are younger members of the West Hill High School boys lacrosse team. The district superintendent said he's canceling the rest of the lacrosse season over this incident.

CNN's Brynn Gingras is here.

Brynn, what happened to these victims? I mean, clearly, they're canceling the season, and the DA is charging.

BRYNN GINGRAS, CNN CORRESPONDENT: I feel like this story is going to make you as angry as it made me. I mean, the DA says, this is hazing on steroids.

SIDNER: Oh.

GINGRAS: Now, what they've gathered so far - this allegedly happened last week. And what they gathered so far, the sheriff's department there, is that 11 students on this lacrosse team were, quote/unquote, hazing five younger players on that lacrosse team. And apparently the ruse was that they were going to bring these five younger players to a lacrosse game and then out for McDonald's or hangout after that.

Well, instead what happened, according to the district attorney's office, was that they brought these players to a remote area of the county for one player in particular. They covered that player's head with a hood - or it was some sort of pillowcase, tied his hands behind his back, and then people came running out of the woods, essentially with the ruse that he was going to be kidnaped. The DA's office said that one person had a gun on them, and also possibly a knife. And then they basically took this player to an area of the woods and basically pretended like he was going to be left there, basically this player actually thought he was going to be left there. I mean, pretty disturbing allegations here.

And apparently the DA's office says that he looked at this video and the students all found it to be amusing. So, there is video of this incident happening.

I want you to hear from the DA's office, again as Sara mentioned, who gave ultimatum to these 11 players about their choice of what they can do in this matter.

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WILLIAM FITZPATRICK, ONONDAGA COUNTY DISTRICT ATTORNEY: Forty-eight hours. Get an attorney. Contact the sheriff's department. Arrange to surrender yourself. You'll be given an appearance ticket. If you don't, if you - if you're tougher than me and you're - you're - you're - you're a - you're a gambler and you're going to play the odds and you don't think you're going to get caught, trust me, the men and women of the Onondaga County Sheriff's Department are going to identify you. You'll be arrested.

(END VIDEO CLIP)

SIDNER: Wow.

GINGRAS: Yes, the district attorney there not mincing words. And I'm not quite sure when that 48 hours started. Now, this news conference happened yesterday. So, the clock is ticking on these players, on their families. The - the families of the students, the five younger students, they didn't want to press charges. But you can see that DA, again, not mincing words, giving this ultimatum. You're going to either be tried as an adult with criminal charges or possibly going to family court, or you can walk away from this. He's saying, I don't want to make this the case of the - you know, the whole year for me, but I do want to set a tone here.

[09:55:02]

SIDNER: He certainly is very serious. And it's interesting that the parents of the victims are saying, well, we don't really want to prosecute.

GINGRAS: Right.

SIDNER: But prosecutors can, if they have the evidence, they can go forward.

GINGRAS: Right.

SIDNER: I'm curious what the community is saying about all this, because I imagine there's a little bit of back and forth with different members.

GINGRAS: Yes. I mean we've seen this a lot with hazing incidents, right?

SIDNER: Yes.

GINGRAS: But as you mentioned, the whole season is canceled now. Of course, there are some parents who are upset about that. We're talking about nine or ten games for lacrosse players.

SIDNER: Right.

GINGRAS: In some cases, maybe their last games if they're seniors. And, really, the - you know, the school is saying that they want to really set the tone here for the culture. They can't - they can't deal with this. They don't want to deal with this. And that's why they made that decision.

SIDNER: Right.

GINGRAS: So, the community is torn right now to be frank.

SIDNER: It's really - it's always something you hear about in college, not in high school so much, right?

GINGRAS: Yes.

BERMAN: Lacrosse big up there, but some things are more important than sports for sure.

GINGRAS: Absolutely.

SIDNER: Thank you, Brynn.

GINGRAS: Yes.

SIDNER: Appreciate it.

BOLDUAN: Thanks, Brynn.

And thank you all so much for joining us today. This is CNN NEWS CENTRAL. "THE SITUATION ROOM" up next.

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