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Now: Combs' Defense Cross-Examines Cassie Ventura; Walmart: Will Raise Prices On Some Items This Month Due To Tariffs; FEMA Report: "Not Ready" For Hurricane Season Starting In 2 Weeks. Aired 1:30-2p ET

Aired May 15, 2025 - 13:30   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: Focusing back now on our breaking coverage of Sean "Diddy" Combs' racketeering and sex trafficking trial in New York. Right now, the prosecution's star witness Cassie Ventura is back on the stand under cross-examination. And moments ago, the judge just weighed in on timing, telling the defense they have until tomorrow's lunch break to continue questioning her, adding that anything after that would be up to his discretion.

BRIANNA KEILAR, CNN HOST: Combs' defense has been trying to challenge roughly nine hours of direct testimony that Ventura has already given. She has told jurors that Combs allegedly abused her and she said that over their 11-year relationship, she felt threatened at times to perform sexual acts with him.

With us now is attorney and legal affairs commentator Areva Martin. Areva, what is your reaction to how the defense is approaching this so far?

AREVA MARTIN, CNN LEGAL ANALYST: So, Brianna, we expected this. We know from the opening statement from the defense a big part of their case is trying to get this jury to believe that Cassie Ventura was a consenting adult in these sexual acts, these freak-offs that we've heard so much about during her direct testimony. So a lot of what the defense has been doing today during this cross- examination is showing text messages and getting Cassie Ventura to acknowledge that, according to these text messages, she was a willing participant in some of these freak-offs.

But one of the things that we haven't done or haven't heard yet, Brianna, is the connection between those text messages in the early stages of the relationship and the violence that we heard so much about during the direct testimony yesterday. And I think when the prosecution gets to redirect, we're going to see them try to link the violence that happened later in the relationship to her participation and make the argument still that she was being coerced into these commercial sex acts with escorts, despite how she may have felt about Sean "Diddy" Combs in the beginning of their relationship.

[13:35:00]

SANCHEZ: And Areva, what do you make of the judge here weighing in on the timing? Because the defense, as our recent reporting indicated, had wanted to go at least through the end of tomorrow evening. I wonder if you think the judge is going to press for them to speed things up here, and that might affect their strategy.

MARTIN: Absolutely, Boris. The judge said from the beginning of this trial that it was going to be an efficient trial, and he was going to do his best to keep it around six to eight weeks. He has said he'll give the defense until tomorrow afternoon with their cross- examination, and any time after that will be at his discretion. Oftentimes these examinations, Boris, start to become repetitive, and the judge is going to assess whether tomorrow afternoon, if he believes the questioning is indeed repetitive, if he believes enough information, the defense has been given ample time to make their case.

So it's always that balance between giving each party, each side an opportunity to make their case, but at the same time, keeping the trial moving so that jurors, you know, that's the big issue here, is keeping these jurors engaged.

KEILAR: For what reason would the judge grant going beyond lunchtime tomorrow?

MARTIN: I think, Brianna, if he believes that the defense has new material, if there are questions that have not been asked before today or tomorrow morning, if the judge believes that the defense makes a credible argument as to why they need more time, judges are often persuaded by arguments from the lawyers that there's, you know, there's a particular area of questioning that they want to go into that they haven't gone into before, and that is essential to them making their case.

SANCHEZ: And when it comes to some of these text messages exchanged between the two of them, Areva, I wonder what you make of them highlighting moments where there was some emotion exchanged between the two of them, Cassie talking about how much she loved Combs, that she wanted more time with him, more intimacy together, and Combs apparently at times reciprocating that.

MARTIN: Well, we know from Cassie's testimony yesterday that she said she was in love with him, that she had really strong feelings for him, and a big part of what the defense again is trying to make the case for is that these text messages are evidence of a couple that were in love, that chose to bring third parties into their sexual relationship, and that at all times Cassie was a willing participant.

But again, trials are marathons, so good day for the prosecution yesterday, some may say, a good day for the defense so far today because they are establishing that at least in the early stages of the relationship there appears to have been some form of consent. But we still haven't gotten to that point where we know that Cassie was saying to Sean "Diddy" Combs, I no longer want to participate in these freak-offs that I'm threatened, I'm concerned about blackmail, I'm concerned about physical violence if I refuse to participate in them.

And these issues of consent, Boris, are very complicated sometimes. Obviously someone can consent to something at one point in time and they can withdraw that consent at a later point in time. So I think we're going to see that concept played out during redirect by the prosecution.

KEILAR: Areva Martin, thank you so much for all of your insights there.

[13:38:27]

And still ahead, a new warning from Fed Chair Jerome Powell, he says inflation could be more volatile going forward. So what does that mean for you? We'll have it next on CNN News Central.

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KEILAR: Walmart's warning. Today, the world's largest retailer said that its prices will go up later this month because of tariffs.

SANCHEZ: And plus, the head of the Federal Reserve warned of supply shocks. Jerome Powell said that those shocks could keep interest rates higher over the long term.

CNN business and politics correspondent Vanessa Yurkevich is here to explain. Vanessa, we're getting all this as new numbers show that people are actually spending less.

VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: Yes, that's right. And we heard from Walmart this morning saying that they're going to have to raise prices by the end of this month. Take a listen to the audio from Walmart's earning call. This is Doug McMillon. Listen to what he said and what he told investors.

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DOUG MCMILLON, WALMART CEO: We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins.

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YURKEVICH: And worth noting here that Walmart is the biggest retail leader in the entire world. So when you have someone like Walmart saying that they cannot absorb these prices and these tariffs, that is concerning for smaller businesses and all retailers who will likely also have to raise prices. And they're seeing increases on toys, electronics and food.

I also want to dig into this a little bit, into what they're saying about these margins. If you look at producer prices that came in today, they fell by 0.5 percent. That's the steepest drop that we have seen since COVID. This is what producers pay. And then they ultimately pass those costs down to the consumers.

However, when we dig into PPI, these producer prices, a little bit more, you can see that it did fall dramatically. But there's something called trade services. And what it revealed in this report is that tariffs are making an impact on businesses. Essentially, businesses are taking home smaller margins or less revenue because of what they have to charge consumers and what they're paying for these prices.

We also got news on retail sales today. We are seeing that consumers are pulling back in spending a little bit. You can see this dramatic uptick that we saw in March as consumers were trying to front load on different goods to beat these tariffs that were coming. About a 0.1 percent, though, increase in April. So still spending but not as much. And you're seeing pullbacks in areas like cars, clothing. These are areas that people were spending a ton on.

[13:45:27]

And now they're starting to pull back a little bit as these tariffs start to seep into the economy. We also heard from Jerome Powell, the head of the Federal Reserve, earlier today, who warned that inflation could be more volatile than post the financial crisis and we could see higher rates. Listen to more of what he said earlier today. There we go. All right. So let me --

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JEROME POWELL, FEDERAL RESERVE CHAIR: We may be entering a period of more frequent and potentially more persistent supply shocks, a difficult challenge for the economy and for central banks.

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YURKEVICH: And so from Jerome Powell there, when he talks about higher rates and supply shocks, that is concerning for the average consumer because higher rates obviously means higher borrowing costs. So credit card rates go up. Student loan payments go up. It just makes it more expensive to borrow. And that is ultimately not what Americans want right now. So many Americans and so many economists at home are hoping actually for rate cuts.

Eventually that will signal a little bit of loosening in the market, Brianna and Boris, and make it more affordable for Americans to pay for things like a mortgage, a house, things that they really want to be investing in.

KEILAR: And the head of the nation's largest bank, Jamie Dimon of J.P. Morgan Chase, is also worried about volatility. Tell us what he's saying.

YURKEVICH: Yes, he certainly is. And he's talking about recession fears. There have been several banks who have reduced their recession forecast based on the fact that President Trump lowered that tariff rate on China to 30 percent instead of 145 percent. But Jamie Dimon is saying that he is not taking a recession off the table. Listen to what he said earlier.

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JAMIE DIMON, CEO, JPMORGAN CHASE: I'm going to defer to economists who give it about a 50 percent chance. I think all these things are probably inflationary a little bit more and slowing down the economy. If there's a recession, I don't know how big it'll be or how long it'll last. Hopefully we'll avoid it, but I wouldn't take it off the table at this point.

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YURKEVICH: And we certainly have avoided a recession for a long time now, many years since the COVID pandemic. Some economists are putting recession odds at 35 percent, 45 percent, even 50 percent, as you heard Jamie Dimon there. But we are not in recession territory yet.

Maybe there are some indicators that are signaling we could get there, but the data we're getting so far, except for a few little cracks, signal that the economy right now is on pretty solid footing. Boris and Brianna?

SANCHEZ: Vanessa Yurkevich, thanks so much for breaking down the details.

[13:47:55]

Coming up, we have a CNN exclusive. An internal review shows that the agency responsible for responding to the nation's disasters is apparently not ready. What's going on behind the scenes at FEMA just days before the start of hurricane season?

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SANCHEZ: So this is a bit unsettling. We're just over two weeks away from the start of what's predicted to be a busy hurricane season, but an internal review obtained exclusively by CNN says that FEMA is, quote, not ready.

KEILAR: This is a document that outlines just a number of issues there, including low morale, poor coordination with states, and increased red tape that could slow disaster response time. CNN's Gabe Cohen is here on this story. This is alarming. What -- what else is on this memo?

GABE COHEN, CNN CORRESPONDENT: Well, look, for weeks now, I've been hearing from sources inside FEMA who have been raising concerns about hurricane preps, but this document we're talking about is really the clearest internal assessment that we've been able to obtain that really acknowledges and lays out this long list of red flags about hurricane season amid this ongoing turmoil at FEMA and this overhaul that's happening at the agency as the Trump administration is working to, at the very least, dramatically shrink FEMA and possibly eliminate it altogether. I'll read you a quote from this document that I think captures it.

It says, as FEMA transforms to a smaller footprint, the intent for this hurricane season is not well understood. Thus, FEMA is not ready. So what they're talking about there is this uncertainty about what FEMA's mission is going to be, what disasters they're going to respond to, how big will the agency be in the weeks and months ahead. As the Trump administration has said, they want to shift more of the responsibility to handle disasters onto the states. But as this turmoil has been happening behind the scenes, preparations for hurricane season, according to this document, have been derailed. There are trainings that have been paused.

The collaborations that are supposed to happen between FEMA and their state and federal partners just aren't happening right now. And then, of course, there is that plummeting morale that's happening for staff at FEMA. So what does this mean for Americans who are likely to face the consequences of these catastrophic disasters?

Well, one FEMA official told me what Americans will see is a federal government that is either absent completely or, if present, sputtering to deliver response and recovery resources. Another told me, I can't think of a more adverse way to be heading into hurricane season. We are all on edge, and we are not seeing hope. We're going in with no confidence that when decisions have to be made in limited time, that impacts saving lives, that those decisions will not have support.

[13:55:11]

So to be clear, the Department of Homeland Security, they don't agree with this. They sent us a statement after our story published saying that this report was taken out of context and that, in fact, quote, FEMA is fully activated in preparation for hurricane season. So we will see.

KEILAR: Yes, well, one of them is right.

SANCHEZ: Yes.

KEILAR: That's what -- that's what we do know, so we'll see, I guess. Gabe Cohen, thank you so much for that great reporting.

And ahead on CNN News Central, we'll go to New York and the criminal trial of Sean Diddy Combs. CNN's reporters are there in the courtroom watching every moment here, and we have lawyers standing by to break down the testimony. Stay with us for that.

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