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Fed Cuts Interest Rates by a Quarter-Point, as Expected; Fed Lowers Interest Rates for 3rd Straight Time; Trump Confirms U.S. Seized Oil Tanker Off Coast of Venezuela; Sources: Admiral Said JAG Officer Assessed it would be Legal to Move Forward with a Second Strike; One of the Last People to See Ana Walshe Alive Testifies. 3-3:30p ET

Aired December 10, 2025 - 15:00   ET

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

DEREK VAN DAM, CNN METEOROLOGIST: ... historic crest by over four feet and that is all because of the rain that continues to funnel into this region down from the mountainsides and into the river basins below. But good news here is that the next 24 hours still we have that tough weather setup but it will lift north and away from the state of Washington as we head into Friday. But hopefully we can start to dry things out by the weekend, but still another tough 24 hours to go. Boris.

BORIS SANCHEZ, CNN HOST: Derek Van Dam, thanks so much for keeping an eye on that for us.

A new hour of CNN NEWS CENTRAL starts right now.

BRIANNA KEILAR, CNN HOST: No Surprises: The Federal Reserve decides to lower interest rates for a third time in a row. What this could mean for your wallet and what the Fed could do next.

Plus, high hopes for Democrats looking ahead to the midterms as they snag another major election win. The woman who managed to break a decades-long Republican hold to become Miami's first female mayor.

And time to pop some prosecco. Italian food becoming the world's first cuisine to be awarded the highly regarded UNESCO status.

We're following these major developing stories and many more all coming in right here to CNN News Central.

KEILAR: We do begin with the breaking economic news. The Federal Reserve making its final interest rate decision of 2025 choosing to cut rates for a third straight time. Rates dropped by a quarter point. This brought the new target rate to between 3.5 and 3.75 percent. And all eyes are now on what this will mean for jobs and inflation. Fed officials predicting at least one more rate cut likely next year.

Here was outgoing Fed Chair Jerome Powell taking a very balanced approach just moments ago.

(BEGIN VIDEO CLIP)

JEROME POWELL, FEDERAL RESERVE CHAIRMAN: In the near-term, risks to inflation are tilted to the upside and risk -- risks to employment to the downside. A challenging situation. There is no risk-free path for policy as we navigate this tension between our employment and inflation goals.

(END VIDEO CLIP)

KEILAR: CNN's Betsy Klein is live for us at the White House.

And Betsy, President Trump certainly wanted a rate cut. Americans got a rate cut. What is he saying?

BETSY KLEIN, CNN SENIOR WHITE HOUSE REPORTER: Yes, it's certainly going to be welcome news for President Trump. And we have asked the White House for reaction to news of this rate cut. Officials haven't gotten back to us just yet. But we do expect to see President Trump any moment now when he hosts a roundtable with business leaders in the Roosevelt Room. We'll see if he addresses this news.

And we've seen the President really reshape the global economic order with his tariff policies. In turn potentially leading to inflation. The President has repeatedly been calling for a rate cut and making very clear his displeasure with Federal Reserve Chairman Jerome Powell who is on his way out.

Now, it's very interesting to note that the President's appointed governor Stephen Miran did not vote for this rate cut because in Miran's view he wanted more of a rate cut. He wanted half a percent and not a quarter of a percent cut. That sentiment had also been echoed by National Economic Council Director Kevin Hassett, one of the President's top economic advisors who is on Trump's shortlist for a potential replacement for Jerome Powell as Federal Reserve Chair.

Hassett told reporters he believes the President will finalize his pick for Fed chair in the next week or two.

Now, the President has also said in a recent interview with Politico that lowering the interest rates immediately is going to be a key litmus test for whoever he selects to be the next Federal Reserve Chairman. So, that is certainly something that he is taking into consideration as he speaks with Hassett as well as Kevin Warsh and other top candidates for this post.

And a reminder that the Fed was making this decision with very little data and that is because of this unprecedented government shutdown. Because of that shutdown we didn't have access to key data like the November Consumer Price Index as well as the November jobs report that could have helped them have a little more clarity as they made this call. This all comes, of course, as the President has ruled his economy an A plus, plus, plus grade. Brianna.

KEILAR: An A plus, plus -- A plus, plus, plus? \

SANCHEZ: I lost count. I don't know how many it was.

KEILAR: It was five -- I think it was five pluses, Betsy. I don't mean to fact check you on that. But nonetheless that was a fantastic report so thank you so much for that.

Let's talk about it a little bit more with Justin Wolfers. He's a ...

KLEIN: (INAUDIBLE) ...

KEILAR: Sorry, Betsy. Then, we cut her off. She had something funny to say. I know she did.

Justin Wolfers is with us. He's pretty funny too. He's also a professor of economics and public policy at the University of Michigan.

What do you think about this rate cut?

JUSTIN WOLFERS, PROF. OF ECONOMICS AND PUBLIC POLICY, UNIVERSITY OF MICHIGAN: Brianna, first of all I'm not funny. I'm insightful. Can we just get that out of the way?

[15:05:03]

KEILAR: No, you're pretty ...

SANCHEZ: Oh, no. You're funny.

KEILAR: ... you're kind of funny.

SANCHEZ: You're funny.

KEILAR: You're jokey.

SANCHEZ: Yes.

KEILAR: It's true. Sorry.

WOLFERS: All right. Hi. Happy rate cut day. Good news. So, yes, good news I think. But really what we have right now is Chairman Powell is at a press conference describing where the Fed's at and I think to really understand what the Fed's done he has this idea of something called the neutral interest rate. The neutral interest rates when your foot is not on the brake, not on the accelerator. He thinks we're there.

I think that gives some color for what the Fed's been doing. A lot of people have been saying it's been trying to goose the economy. No, it hasn't. It understood itself as having the foot off on the brake and it's eased its foot off the brake and I think that probably means it's going to take a fair bit of movement one way or the other to get the Fed to continue changing interest rates any further in the -- in the short run.

SANCHEZ: The Fed is -- is stuck in a weird position right now, because not only do they have incomplete or -- or opaque data on the jobs market but the signs that they do have show that it is lagging. And on the other hand, you have inflation that just refuses to go away. So, do you think that any economic outlook that Powell presents today is reliable in the sense that it is likely to be what will happen next year? What we'll see from the Fed next year?

WOLFERS: Two answers. Predicting the future is notoriously hard, especially about the economy and so, of course, it'll be wrong, but the Fed will be less wrong than anyone else. There's a slew of studies that show that. And so, what we heard Powell say today was actually two sources of worry. He looks deeply worried. I -- either something's going wrong with the economy or something's going wrong with his Botox.

SANCHEZ: He's funny.

WOLFERS: On the one hand he said that he's -- he's worried that inflation is above target and it might stay there. And on the other we see the unemployment rate seems to be rising. And monetary policy can't fix both of these problems. At some deep level the problems are much more from the White House tariffs and the like and the Fed can't fix everything.

KEILAR: And Powell said that he believes the effects of tariffs on inflation will be relatively short-lived. Do you think that's true?

WOLFERS: He said that and he hoped it. And if you looked very closely he also sort of tapped the ground three times and got out his wand. He's hoping that's true. This wouldn't be the first time we've heard someone say inflation is going to be transitory.

Our economic models say that when you raise costs, which is what tariffs do, that causes businesses to raise their prices and that should be it just a one-off adjustment. We also saw how that played out through COVID and it turns out when economists say transitory it can be a whole lot less transitory than -- than people in Washington like to believe. In economics transitory is a few years. In Washington it's a couple of weeks.

SANCHEZ: Yes it's been transitory inflation for about four years now. Also, notably new data shows that last quarter, workers' wages and benefits rose at the slowest pace in more than four years. Why do you think that is?

WOLFERS: Well, because we have a slowing economy and the unemployment rate was -- has been below 4 percent previously. It's been drifting up over the past couple of years and it's drifted up throughout this -- throughout 2025. So, it's a tougher year for workers. If you just talk and ask around or you can look at the statistics there are fewer people being hired. There's also not so many people being fired right now.

One of my favorite ways of thinking about our workers confident about the economy is to ask do they have the courage to quit a bad job. Hopefully believing there's something better out there and what we see right now is that quits are very low. So, that's another way of saying workers are feeling stuff out there is pretty tough. If they're not going to quit a bad job maybe they'll stick around even if pay isn't rising.

SANCHEZ: Justin Wolfers is great to get your perspective and your humor as well. Whether you like it or not, you're a funny guy.

KEILAR: Yes Botox jokes. I didn't -- I didn't have that one on my bingo card, but I'm glad that -- I'm glad you told one. It was good.

SANCHEZ: Some breaking news right now into CNN. President Trump confirming that the United States has seized an oil tanker off the coast of Venezuela. We're going to have more on that in a moment.

Plus, a deep divide on the Hill as lawmakers scramble for a solution before millions of Americans see their health care premiums spike at the end of the month. That much more coming your way.

(COMMERCIAL BREAK)

[15:13:52]

ANNOUNCER: This is CNN Breaking News.

SANCHEZ: We're following breaking news. The U.S. has seized an oil tanker off the coast of Venezuela. Confirmation coming from President Trump just moments ago.

KEILAR: And this also comes as the President has ordered a huge military buildup in the region and has launched strikes for months now on alleged drug boats. We're joined now by the former Air Force Secretary Frank Kendall.

And we're learning details obviously still at this point, but your initial reaction to learning of the seized oil tanker, what this means?

FRANK KENDALL, FORMER AIR FORCE SECRETARY: It seems to me to be an escalation of the level of pressure we're putting on Venezuela and on President Maduro. Quite frankly, I don't know where this is leading or what the overall intent is here. But this is a substantially bigger step to take than the ones we've taken before this.

SANCHEZ: To the point of trying to discern what the intent is, experts have pointed to energy as the linchpin of this nexus of countries that are adversaries of the United States in the Western Hemisphere: Cuba, Nicaragua, obviously Venezuela. I wonder whether you think it also lends credence to the idea that the administration is specifically going after Maduro in part for his energy.

[15:15:03]

KENDALL: It's -- I think it's pretty clear that the intent here is ultimately to take him out of power one way or the other. I don't know how far we're prepared to go in -- in that direction. The force that we have in the Caribbean is not large enough to support an invasion, but it could -- could support strikes. It's got a lot of air power, naval power, relatively small marine force, some special operations capability.

So, we could be doing air strikes, which have been, you know, implied for some time. We could be doing something in support of a coup, that's possible. We could be doing raids. We could be targeting, you know, drug facilities and so on. I don't know. It's not at all clear what the actual intent is here. It may be some hope that Maduro will just realize that the game is up and -- and leave the country. I think that may be wishful thinking, but that's a possibility.

KEILAR: Looking at previous U.S. involvement in the region or in like this, there are there are cautionary tales. what are you -- what's on your mind as you're thinking about this?

KENDALL: There's a very long history of U.S. intervention in South America which is not a very pretty story. You know, I -- I've seen some of that throughout my career, Panama one time, (INAUDIBLE). I -- again, I don't think the force we have in this case is large enough to do an attack and seize -- seize control when Israel is a big country with a pretty good-sized military, but that -- that said I don't know where President Trump is going with this. He declared a no-fly zone essentially or closed airspace which we have no prior power to enforce so what are your intents with that?

Again, there's a lot of mystery about this and I think it would be very helpful if president were a little clearer about what he's actually trying to do here.

SANCHEZ: Lawmakers on Capitol Hill are hoping that the administration would be more clear on exactly what happened with that second strike on these apparent survivors of an initial strike suspected drug traffickers. Initially, the President and Secretary Hegseth made statements saying that they were open to footage of that second strike being released to the public they have since hedged on that.

You've obviously been on the other side of oversight as Air Force Secretary. What reasons would you see for this video not being released to the public?

KENDALL: I cannot conceive of any reason not to release the video other than that they don't like what's on it and don't want people to see it. What -- we've had various stories about this ever since it came out, you know? It's been shown to some people on Capitol Hill. We've got dramatically different interpretations of what -- what those -- those people saw. So, let's all see it.

I don't know of anything that could be classified that would prevent it being released and if there was that sort of thing could be removed somehow. We really need to see what happened so we can judge for ourselves what happened here It's also really important I think to remember that it's not just these strikes on these two survivors. It's all of these strikes. They're all illegal.

There is no war with the drug dealers. The President's unilaterally decided that he wants to have a war with them and start killing people. Congress declares war, not the President. And so, we -- really need to put this in context of all the operations are going on here and try to hold the administration accountable for what it's doing.

I can go on and on about this, but the -- the effectiveness of this seems to be very little. The targets that we're attacking are taking cocaine that's bound for Europe to other parts of the Caribbean. They are not taking fentanyl into the United States. So, the whole rationale for this all falls apart.

We've captured some people, but we didn't keep them and interrogate them or treat them as prisoners of war. We sent them back to their home countries. It all -- it all falls apart when you start to look at the details behind what we're doing here.

KEILAR: There are two sources with direct knowledge who told CNN that Admiral Mitch Bradley told lawmakers last week he'd consulted with the uniformed lawyer on duty during the operation before he approved that secondary strike that killed survivors. The source is adding: "The JAG officer assessed it would be legal to move forward with the second strike."

To give context to our viewers, though, they -- they need to understand that as Secretary Hegseth came into the Pentagon he essentially eviscerated the top JAGs, the top legal officers. And he changed the system the entire sort of operation of that JAG core is very much under fire right now.

So, hearing that learning that information, how do you see that considering the broader context?

KENDALL: I've heard about this. I'm very concerned about this. The -- and every time we do a strike where there's chance to, you know, look at it carefully and decide what to do -- judge advocate officers are -- provided opinion on whether it's a legal strike or not.

When -- when Secretary Hegseth fired the three top lawyers for the military departments on his vicious his first act, I was very concerned. And what he has said -- he said this in the Oval Office is that he wants maximum lethality not tepid legality. Those are his words. And you're seeing it play out in the -- in the killing of these people.

KEILAR: Former Air Force Secretary Frank Kendall, thank you so much. It's great to get your perspective.

KENDALL: Thank you. Good to be with you.

[15:20:00]

KEILAR: Some key testimony today in the trial of the man who admits to disposing of his wife's body, but says he did not kill her. The testimony from the last person known to have seen Ana Walshe alive, next.

(COMMERCIAL BREAK)

[15:24:51]

SANCHEZ: Breaking news in the Brian Walshe murder trial. The Commonwealth has just rested. One of the final witnesses prosecutors called was Ana Walshe's former boss. He was one of the last people to speak to and see her alive. He said their last conversation included her telling him there were cracks in her marriage. CNN's Jean Casarez takes us through the testimony.

(BEGIN VIDEO CLIP)

JEAN CASAREZ, CNN CORRESPONDENT: Gem Mutlu is such an important witness for the prosecution because he saw Ana Walshe in the hours before her life ended. He saw her demeanor how she was reacting how Brian was reacting, because he was invited for Christmas Eve to the couple's house.

He said that he had a phone conversation with Ana. He was very close with both of them. On the 29th, he had that conversation over the phone and he could tell that she had issues. She had problems. He does remember one thing she said that it was a strain on her that the children couldn't be with her in Washington, D.C. for the big job that she had. She had to keep going back and forth.

He said that one New Year's Eve that everything was fine. Everyone was happy. It was joyous. Everyone was looking toward the future. They sat at the island in the kitchen and she was on her phone a lot sending texts of Happy New Year to people, but that everything was fine. They signed a champagne box about what they were looking for in the next year.

He also said that at one point, she took a picture of him, Gem, and her to send to William Fastow, because he knew William Fastow and that was the affair -- the man she was having an affair with. I want you to listen though, on January 4th, when Brian Walshe calls up Gem Mutlu to say my wife is missing.

(BEGIN VIDEO CLIP)

GEM MUTLU, ANA WALSHE'S FORMER SUPERVISOR: I said -- I mean, I said -- I was incredulous. I said, "What work emergency could there have been on New Year's Eve that, you know, on this commercial property? What could -- what could it be?" I said, "Listen, did you guys have an -- argument or something? Did you have a fight?"

UNIDENTIFIED MALE: And what was his response to that statement, sir?

MUTLU: His -- -- his response was -- I do remember this vividly as well -- his response was: "No. Did it look like we had an argument? You were there."

UNIDENTIFIED MALE: And what did you say to that?

MUTLU: I -- I -- didn't -- I didn't know what to make of it.

(END VIDEO CLIP)

CASAREZ: The prosecution will use that question and response right there to really probably further their motive for murder in this case, because Gem Mutlu, why would he ask if there was a fight, if there was an argument and why would Brian Walshe respond in that way, Brianna, Boris?

SANCHEZ: Our thanks to Jean Casarez for that update. Still ahead, another sign -- positive sign for Democrats as the party gets another win this time in the Republican stronghold of the city of Miami.

Plus, lawmakers facing pressure to make a decision by the end of the month before many Americans see their health care premiums skyrocket. We'll speak with senator Ruben Gallego next.

(COMMERCIAL BREAK)