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Taylor Swift Engaged; Trump Attempts to Fire Federal Reserve Member; Trump Holds Cabinet Meeting. Aired 1-1:30p ET

Aired August 26, 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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BRIANNA KEILAR, CNN HOST: Showdown at the Fed. President Trump says you're fired to Fed governor Lisa Cook, but Cook says she's not going anywhere. We will have more on this escalating battle.

BORIS SANCHEZ, CNN HOST: Plus, don't want them, don't need them. The governor of Illinois is warning President Trump again sending National Guard troops to Chicago. We have the latest in this ongoing constitutional feud.

And do you want the weight loss drugs, but can't stand getting injections all the time? A new GLP-1 pill could be one step closer to reality.

We're following these major developing stories and many more all coming in right here at the CNN NEWS CENTRAL.

KEILAR: We have been listening in closely to President Trump's Cabinet meeting, as we're learning that the Federal Reserve governor, who he said he fired is saying she plans to stay and is now planning to sue.

A lawyer for Lisa Cook tells CNN a lawsuit is in the works, saying Trump's attempt to oust her -- quote -- "lacks any facts or legal basis." Trump has accused Cook of mortgage fraud, but Cook, who has not been charged or convicted of a crime, has vowed to fight and stay.

Let's go to CNN's Alayna Treene, who is live for us at the White House.

Alayna, the president is holding this Cabinet meeting right now. Has he said anything about Cook or the Fed?

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: He has not.

And that's partly because, Brianna, we have not heard him yet take questions from reporters. He's had a very lengthy kind of list that he wanted to go through. He talked about you know what he prefers to as the One Big Beautiful Bill, although, this time, he said he wants to frame it more as a tax cut for the middle class.

He talks a lot about a lot of the things we have heard him focus on in the past, some of it, of course, being what he is doing here in Washington as it relates to having the National Guard in the city streets, as well as federal law enforcement agencies.

And he actually repeated a line that we heard him use yesterday. It sounds like this is going to be kind of a new thing he talks about in referencing trying to lower crime in D.C. He said that sometimes people refer to him as a dictator and that he will maybe take that if it means that he's lowering crime.

Take a listen to how we put it.

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: So, the line is that I'm a dictator, but I stop crime. So a lot of people say, if that's the case, I'd rather have a dictator.

(LAUGHTER)

TRUMP: But I'm not a dictator. I just had to stop crime. And you would think that Illinois would have such a problem with crime, such a bad governor. He should be calling me and he should be saying, could you send over the troops, please? It's out of control.

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TREENE: Now, Brianna, of course, what he's saying there is referencing a lot of the back-and-forth barbs that he's actually been treating with the Illinois governor, J.B. Pritzker, about the president's desire to try to use Washington, D.C., as a model for what he wants to do in Chicago.

So, a lot of that conversation, of course, dominating the president's mind. And part of that is because, in my conversations with White House officials they tell me that the president's been reveling in what he's seeing here in D.C. in the photos of the National Guard troops out on the city, now they're carrying weapons, also the federal law enforcement agents, all to say a fight that he clearly wants to keep harping on in almost every public appearance he is having in recent days.

But just to get back to some of what you mentioned at the top here, which is so much attention right now being on his attempt to fire Lisa Cook, the governor, one of the Fed board governors. And, look, I think there's so much that we have seen with this.

In my conversations with people here, in the Trump administration, a lot of it, they say, is he said that he would do this. Of course, the president is accusing her, allegations of fraud when it comes to mortgage rates. And a lot of what they're telling me is that he's been saying he would do this if she didn't resign.

Well, now, hey, he's making good on his word. But, of course, there are so many implications of this, particularly when it comes to questions of whether he actually has the legal authority to do this.

Again, these are just allegations about her, and also calling into question how independent the Federal Reserve is actually going to be moving forward, so many implications about its independence, about its operational control if the president is successful with this. And I think the bottom line, and hopefully we will get some more answers once he starts taking questions, is that this is likely headed to the courts if this moves forward.

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And of course, we have now seen Cook's lawyer, Abbe Lowell, actually say that they are planning on filing a lawsuit to challenge what the president is trying to do. So all of that hopefully will be unfolding shortly in the Cabinet meeting when he starts taking questions, Brianna.

KEILAR: All right, we will be looking and waiting for that.

Alayna Treene at the White House, thank you -- Boris.

SANCHEZ: Let's discuss with Tom Dupree. He's a former deputy assistant attorney general.

Tom, thanks so much for joining us this afternoon.

So a CNN review of mortgage documents shows that Cook did take out mortgages for two properties and listed both of them as her principal residence. At this point, though, we don't know why she did that, if she did so intentionally. Given that information, does that constitute cause for Trump to fire her?

TOM DUPREE, FORMER JUSTICE DEPARTMENT OFFICIAL: Well, the Supreme Court ultimately is going to tell us the answer to that question.

I think that, under the law, the president clearly does have the legal authority to fire a member of the Federal Reserve for cause. I think what's a closer question, though, is whether what the president has at this point amounts to cause to fire her.

As you point out, she hasn't been charged with anything yet, and it's possible that there could be a legitimate explanation for why she designated two principal residences that were different. And so it's possible that a court might say, look, the president does have the legal authority to fire someone for cause, but we just don't see that quite yet.

We need more evidence. We need to make either a criminal determination that she did commit mortgage fraud or we need at least some sort of evidence more than what we have to date, which is simply a criminal referral from someone else in the Trump administration.

SANCHEZ: Yes, and DOJ has said that it is going to follow up on that referral and actually investigate. I wonder what kind of charges she could face. You sort of framed it as there being a potential perfectly legitimate explanation for why this would have happened. What are some reasons?

DUPREE: Well, again, it is possible there is an explanation.

I mean, one explanation is that maybe she wants to claim that she did in fact have two separate principal residences. It seems a bit far- fetched to me. Another possibility is she could just say she made a mistake. We have seen this in the context of other mortgage fraud allegations that have been circulating out there, where she might just say, look, it's wrong.

I made a mistake when I filled out the forms. And so even though what I put down was wrong, I didn't act with criminal intent. Again, we will see what she says. I suspect right now she's huddling up with her lawyers, trying to make sense of this and trying to figure out what the argument is as to why these documents do not reflect any effort to engage in mortgage fraud.

SANCHEZ: The Supreme Court is potentially going to hear a case on whether Trump has the right to fire her or not. And in the past, the court has allowed Trump to fire leadership at independent agencies.

But just a few months ago, they specifically weighed in around -- they drew a line around the Fed and they described it as a sort of quasi- private enterprise that the executive branch doesn't necessarily have reach in. Help us understand what that means.

DUPREE: Right.

Well, that is a question that all of us Supreme Court lawyers have been poring over, trying to figure out what exactly the Supreme Court meant by that. Here's what we know. Number one, the Supreme Court is giving this administration broad authority to terminate the heads of independent agencies.

So I think that's the baseline you start from, that the Supreme Court is going to be inclined to give the president authority to do it. But then you get to the point you made, which is that, in one of their recent opinions, they did say that the Federal Reserve is different, that it's unique, it plays a central role in our nation's history and that maybe it should be treated differently than other independent agencies.

But, of course, we don't know whether that means that the Supreme Court is ultimately going to say you need something more to fire a member of the Federal Reserve than other independent agencies. That is the question that is going to be squarely teed up by this Lisa Cook case and one which we will have an answer to in the near future, I suspect.

SANCHEZ: And, Tom, if the Supreme Court ultimately allows Trump to fire a member of the Federal Reserve Board, how far does that go in undermining what is supposed to be the Fed's independence?

DUPREE: Right. I think it basically would say the independence really exists at the

pleasure of the president, that there is no separate independent check on who can serve or who can be removed from the Federal Reserve.

And I think that raises the larger question and the larger possibility, which is that here the ultimate constraint may not be placed by the courts, but it may be placed by the markets, who would respond to what they could potentially perceive as a president acting, not in order to really remove someone genuinely for cause, but one because he wants to have his own people serve on the Fed.

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That's a market constraint, rather than a judicial constraint. And we will just have to wait and see what the markets say in the weeks and months ahead.

SANCHEZ: That's a really good point.

Tom Dupree, great to have your expertise. Thanks for joining us.

DUPREE: Thanks.

SANCHEZ: Brianna.

KEILAR: President Trump's unprecedented move to fire Federal Reserve Governor Lisa Cook jolted the dollar. It weakened against major currencies soon after the president posted that letter to Cook on social media saying her removal was effective immediately.

His actions raising worries about the independence of the Central Bank.

Joining us now is Justin Wolfers. He's an economics professor at the University of Michigan and knows Lisa Cook personally.

Justin, your reaction and what this could mean for the independence of the Fed?

JUSTIN WOLFERS, UNIVERSITY OF MICHIGAN: I think this is terrifying.

We have a system for how we appoint Federal Reserve governors. They're appointed for 14-year terms for a reason. The reason is, we want to keep monetary policy insulated from politics. We want the Fed to make decisions in the best interests of the American people, rather than the political interests of the president.

If he proceeds down this path, then we get a step closer to a banana republic. This is the sort of thing we have seen before, and history tells us it never ends well.

KEILAR: So let's talk about why people should care. Let's talk about their bottom line. You point out Turkey as a cautionary tale.

WOLFERS: Yes, Turkey is almost a perfect case study for what we're talking about here. Turkey, much like the United States, elected a populist strongman.

There, it was Erdogan. Here, it was Trump 10 years later. Erdogan, like Trump, has a particular love of low interest rates. I don't understand why for Erdogan, but, for Trump, it's, as a real estate developer, he thinks that low interest rates make the world go round.

We're lucky that we have seen this movie before. What happened was that Erdogan appointed a loyalist to head the Central Bank. He got rid of the economists and got rid of people acting in the best interests of the broader public. He told the loyalists -- Erdogan is like Trump.

He has a robust confidence in his own world view, even when it's at odds with those of expert economists. And so he told his people, go ahead and keep interest rates low even when it doesn't make sense. Trump has been saying the same thing recently. And subsequently inflation in Turkey got as high as 86 percent.

And last I looked, it was in the high 30s. This has caused immense damage throughout Turkey. And it's exactly the playbook that the president is looking to replicate right now.

KEILAR: So Trump wants lower interest rates. We have known that, right? That's the drum that he's been beating since he took office in January.

Powell did just signal a rate cut is coming next month. Was this necessary? Could the Fed have already been headed in this direction?

WOLFERS: So what Trump wants and what the Fed is doing are in fact very different. Trump has asked the Fed to reduce interest rates all the way down to 1 percent, which is the sort of thing you would do if you felt that the economy was collapsing into a terrible recession, a financial crisis or something, but not the sort of thing you do in ordinary times.

Look, here's the irony. In fact, what Trump has done defeated his own purpose, which is to say, you're right to say Trump wants interest rates to be lower. Now, what he's managed to do by interfering here is, short-term interest rates are expected to be a little bit lower over the next couple of years if he does because he might appoint a loyalist.

The problem is, if he does, that would cause inflation to rise. As a result, literally, he's caused long-term interest rates to rise. Guess what matters for the state of the economy? If you're building a factory or investing in real estate, it's long-term interest rates. The more he monkeys about with the Fed, the higher long-term interest rates will go, and that will have the opposite effect that the president was hoping to have.

KEILAR: Justin, fact-check this for us, because, earlier today, the president said there's no inflation.

WOLFERS: Not true. Inflation is 3 percent. The Fed's target is 2 percent. Inflation was as high as 9 percent during the pandemic, and one of the great achievements of the Powell Fed is that they managed to get inflation down without causing a recession, which everyone said wasn't possible.

But we're not all the way there right now. And more to the point, you can't lie about this. Every one of your viewers goes to the grocery store. Every one of them knows prices are going up, and inflation remains a problem, not as big of a problem as it was in the past, but it remains a problem.

And if we implement tariffs on the order that the president has already started to implement, we're going to see inflation further, possibly with a slowing economy as well.

KEILAR: Justin Wolfers, thank you, as always, for being with us.

WOLFERS: A great pleasure.

KEILAR: And ahead: President Trump going after Illinois' governor as he threatens to send troops into Chicago. Do the city's residents want him there? We ask them.

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Plus, a huge dust storm engulfing Phoenix, grounding flights, knocking out power, plunging the city into darkness, and that's before the monsoon that followed.

And the Internet, consider it broken, the most high-profile couple in the world announcing their engagement. You know who it is, Taylor Swift, Travis Kelce. We have details. We have pictures. Stay with us.

SANCHEZ: Oh, my God. Oh, my God.

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SANCHEZ: Wow, some colossal breaking news into CNN.

KEILAR: Giant.

SANCHEZ: It's a love story and, baby, she just said yes.

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KEILAR: She just said yes.

SANCHEZ: Pop Icon Taylor Swift and her football star boyfriend Travis Kelce are engaged.

KEILAR: And that means that lots of people are hyperventilating because this news broke moments ago online.

CNN's Lisa France is on the phone. And executive music editor for "Variety" Jem Aswad is joining us now.

OK, Jem, first things first. Let's talk about how this all went down. She puts out a bunch of pictures, so that kind of satisfies the curiosity of the engagement here. Beautiful. And it is set to her song "So High School." The caption here is, let me pull it up. It says, "Your English teacher and your gym teacher are getting married," which is kind of cheeky.

What do you think about this?

JEM ASWAD, EXECUTIVE MUSIC EDITOR, "VARIETY": Well, it's -- I certainly wasn't expecting it in the middle of a Tuesday afternoon, but it's not really a surprise.

And if you think about it, the podcast they did a couple of weeks ago, that was sort of an introduction in a lot of ways because, for a lot of us, like I had never really seen Travis Kelce like that before. He seems like a good dude. And they genuinely seem to be in love.

And, obviously, because Taylor Swift doesn't do anything by accident, it was sort of, I think, a prequel to this announcement, sort of introducing them as a couple to America.

SANCHEZ: Lisa, what is your reaction to hearing this huge news?

LISA RESPERS FRANCE, CNN ENTERTAINMENT REPORTER: I feel absolutely vindicated because back when she announced that she was going to be on the podcast, I actually said, is this the Easter egg of her letting us know that an engagement was coming soon?

Swifties, some of them were outraged. They were like, we don't care about her personal life. We care about the music. And I'm like, come on, you all. We know that you care about the personal life. So I personally feel like -- I'm not even a major Swiftie, and I feel like I should be crying right now. It's like such exciting news.

The photos are so beautiful. They're so Taylor Swift-coded, I mean, just -- I mean, just lovely. They are super-duper in love. And I agree. The podcast was absolutely the run-up to us seeing them have these personal moments and us understanding that that man is pretty much a human golden retriever when it comes to Taylor Swift, because he is so completely in love with her.

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RESPERS FRANCE: And we love to see it.

KEILAR: Lisa, I feel like there's two reactions, at least judging by a very scientific poll that we have conducted here among our floor crew, which is you have the, oh, my God, hyperventilating folks. I don't know that. That might be me.

SANCHEZ: Oh, sure. Oh, God.

KEILAR: I feel like that's a little bit you. Boris is the one who broke the news to me in the middle of another story.

SANCHEZ: Whoa.

KEILAR: And I might have weirdly done a little dance. I didn't expect that, but I did. And then we have a lot of folks, Lisa, who are concerned what this is going to mean for Travis Kelce and his football career. Is he going to be distracted by some big wedding in the works? There are concerns, Lisa.

RESPERS FRANCE: Oh, there are concerns, but come on. The Brads, Chads and dads of the world are going to have to get over it, because even his father -- Travis' father said that this is the happiest that he's seen him. And they just -- they love each other. Like, I mean, football is football. He has a job to do. She has a job to do. And I think that they have come together and supported each other in ways that can only help his game.

And so I don't think people need to worry about, is he going to be distracted? I think they're going to be just fine. And I personally cannot wait for all the content that I hope we get. I hope we get the bridal shower. I hope we get the bachelor party, we see Jason with his beer having a blast wherever they go to party.

And so I'm super excited. And I feel like the football fans need to be excited as well.

SANCHEZ: Jem, to the point that Lisa just made, there is going to be a lot of content produced unquestionably around this engagement. There's an immense amount of interest.

We should note she has an album coming out fairly soon, I think in the next month or so, somewhere in the next few weeks or so.

KEILAR: Yes? I like that you know that.

SANCHEZ: But, Jem -- well, I mean, we did a story on it.

But, Jem, talk to us about the significance and the place that Taylor Swift has right now in American culture. Because if you were going to try to explain where she stands, especially alongside Travis Kelce and the sports world on the platform that she has in American culture, it's almost like American royalty, this couple, isn't it?

ASWAD: Oh, it's beyond that.

I was -- my daughter started law school yesterday and she said to me, what is Taylor Swift doing in my torts textbook? And I said, she and Donald Trump are the most inescapable people in history in terms of pop culture. And I don't mean that for her in a negative way at all. But she has become the most -- one of the two most recognizable people in the entire world.

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Travis is, of course, coming along with that. But, to be honest, what this really is, this is beyond a huge Christmas present for the media world, OK, because nothing gets clicks like Taylor Swift. And it's just -- it's going to be Christmas for the next several whatever your holiday of choice is where you get presents.

KEILAR: Yes, the other thing in here, we see Jason Kelce there too, because he does the podcast with his brother. I will say, Jem, something I think for a lot of Taylor Swift fans is they have been introduced -- like, they get these sort of bonus guys, right, the Kelce brothers.

They have been introduced to Kylie Kelce as well, a lot of fun to be had there. And I just wonder what you think about how there's kind of been this synergy, NFL, Taylor Swift. You have these athletes, hilarity ensues. What do you think about that?

ASWAD: Yes, it's kind of amazing the way that they have orchestrated the whole thing, because obviously a lot of it was very intentional. That podcast was meet the meet the future fiance to all of her fans, to the world really.

And these people -- just going back to the thing about people being concerned about his football career, these two are nothing if not professionals, OK? They know how to get their jobs done probably at great expense to their personal lives, but they also both understand that.

One of the things that really struck me about the podcast was the two of them saying how similar their lives are and how similar they're -- I hesitate to call them jobs, but it's like the physical training, the workouts they have to do how physically demanding those jobs are and how they're both really performers.

And this is really an extension of that performance in a lot of ways, but not in a cynical way because they both seem to be embracing it.

SANCHEZ: Jem and Lisa, thank you both.

We're staying on top of this big breaking news, Taylor Swift, Travis Kelce announcing their engagement, a huge moment for the culture.

KEILAR: It's giant.

We have been told we have to go to break. I was going to blow out the breaks, go wall to wall, but I have been overruled. So we're going to show you these beautiful pictures that, of course, have culminated in this beautiful news today.

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KEILAR: And we will be right back.

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