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Fed Raises Key Interest Rate; Trump Sons Involved in Cabinet Searches; Trump's Stake in D.C. Hotel; Ceasefire in Aleppo Falls; Obama's Decision to Avoid Syria War. Aired 2-2:30p ET

Aired December 14, 2016 - 14:00   ET

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

(COMMERCIAL BREAK)

[14:00:11] BROOKE BALDWIN, CNN ANCHOR: All right, here we go. Top of the hour. You are watching CNN. I'm Brooke Baldwin. Thank you for being here.

Any moment now, a matter of seconds, in fact, the Federal Reserve is expected to raise its key interest rate, which we'll bring that to you, of course, as it happens. A rate hike would mark a financial milestone because the Fed has only raised the federal Funds Rate once since 2006. Officials say they wanted to see a stronger job market before boosting it again and they got their wish.

Right now we're also keeping a very close eye here on Wall Street for any sign of how the stock market may react as it's still flirting with that record-setting 20,000 mark. We're watching it.

Also one huge question as we look ahead to the next administration is the Federal Reserve about to get a massive makeover thanks to the 45th president of the United States, Mr. Donald Trump.

So, we have Alison Kosik, CNN Money business correspondent standing by for us at the New York Stock Exchange. As soon as we get the news from the Fed, let me know. And Heath - oh, and Hitha Herzog is with me, retail analyst H Squared Research and author of "Black Market Billions."

Before we talk to you, Alison Kosik, you have to scoop, will they be raising that rate?

ALISON KOSIK, CNN MONEY BUSINESS CORRESPONDENT: OK, so the Fed, for the first time of the year, has raised interest rates a quarter of a point, quarter of a percentage. That's 25 basis points. The last time the Fed raised rates was last December.

Now, the one thing that investors are looking for is how much or how aggressive the Fed is going to be in future. Now, what the Fed said as it was giving this information is that they're going to raise rates at least three times next year. Now that's a little bit more aggressive than investors had hoped for. That could be part of the reason you are seeing all the major indices turn solid red.

Now, the Fed has been hinting, so this is not a big surprise that rates went higher, the Fed's been hinting, dropping big hints since the summer, that it would raise rates in December because, frankly, you know, they basically think the economy is ready for it, although some people say the economy's not booming. You look at the employment picture, unemployment - the unemployment rate is at a nine-year low. We're adding at least 180,000 jobs on average every month. You're seeing GDP is up in the third quarter 3.2 percent. So all the signs are there that the economy can handle it.

OK, so now that the Fed has went ahead and raised rates, in about a half hour, Brooke, Fed Chief Janet Yellen is going to be holding a news conference. And although the Fed is independent, not supposed to be political, many are calling on Fed Chief Janet Yellen to talk about a Trump presidency. It's being called the elephant in the room. One thing Fed Chief Janet Yellen doesn't want to look is sort of politically leaning toward one way or the other. But the fact of the matter is, many people do believe that the Fed is kind of privately looking at how a Trump presidency will affect the economy. Trump policies are expected to be pro-growth, low taxes, low regulation, more spending. Those are things that can heat up an economy and that could be part of the reason in the thinking for the Fed to start raising rates now, to kind of get out ahead of it and be proactive instead of being reactive.

Brooke.

BALDWIN: You hit on two important points. We'll come back to the influence that President-elect Trump would have on the Fed.

But, Hitha, to you. In a sense - I mean it's great news if the job market is as strong as it is for the Fed to feel confident enough to raise the rate. My question to you is, this directly affects people with credit cards, people who want to buy homes, want to buy cars. How much does this affect them?

HITHA HERZOG, RETAIL ANALYST, H SQUARED RESEARCH: Well, the interest rate didn't go up that much. It was 0.25 percent, which is - I mean it's definitely an - it's an increase. However, when you're really going to see the impact on credit cards is when you start seeing that interest rate go up many times during the year. So now it's not going to have a huge impact on credit cards. However, if you are carrying large balances, let's say you're going out and shopping for the holiday season -

BALDWIN: For the holidays, as we should be.

HERZOG: You have those large balances on however many credit cards, you will probably then want to make sure that those balance are paid down -

BALDWIN: Yes.

HERZOG: Or you want to start getting rid of that -

BALDWIN: Yes.

HERZOG: Because that's going to start increasing your - you know, the interest rate. The interest that you carry over on those cards. BALDWIN: OK. I say "as we should be" because I haven't started.

Any whoo, with regard to President Trump and his influence over the Fed's future, I was reading the piece on cnnmoney.com, two spots on the Fed's committee are currently open for Trump to nominate. How might he impact what we see financially moving forward?

HERZOG: Right. Well, he's notoriously anti-Fed. So he there has a little bit of leeway to appoint whoever he wants to those positions. And, you know, I think it's up to, you know, 12, up to almost - you know, two up to almost 12, I should say, that he could potentially appoint. Also, Janet Yellen is due to -

BALDWIN: That's what Alison mentioned, (INAUDIBLE).

HERZOG: In 2018.

BALDWIN: Yes.

HERZOG: So there's an opening right there. Now, will he implement his own policies there or kind of steer it the way that he wants it to, you know, look the way he wants it? Probably.

[14:05:08] BALDWIN: Yes.

HERZOG: However, if you look at what the markets are doing right now, it looks like people are really responding well to what Donald Trump kind of had financially planned out for the country. Just in terms of what he's saying, in terms of job growth, just in terms of the deregulation. Who knows if that's going to continue.

BALDWIN: Right.

HERZOG: Who knows what he - you know, if - what his plans he wants to implement will, in fact, materialize in a positive way. But right now we're seeing that Trump effect go gang busters. I mean we're -

BALDWIN: Almost 20,000 -

HERZOG: Exactly.

BALDWIN: Almost 20,000.

Hitha, thank you so much.

HERZOG: Thanks for having me.

BALDWIN: Alison Kosik, thank you, down at the New York Stock Exchange.

Let's move on to talk politics. Right now President-elect Donald Trump, he is meeting with perhaps the most unfriendly crowd thus far at Trump Tower, about a dozen or so tech titans from places like FaceBook and Google and IBM and Amazon and other Silicon Valley companies. They're scheduled to visit the president-elect right now, sitting behind this closed door meeting. Mr. Trump blasted Apple and Amazon and others when he was back on the campaign trail and it's certainly no secret that the tech industry has not exactly supported him with some major players labelled Trump as quote/unquote "divisive."

But today the two sides are meeting with a common goal - create more jobs. As the president-elect talks employment, we are learning that his sons have been taking part in some key new hires for their father's administration.

Let's begin there with Sara Murray, who is live for us this afternoon just outside of Trump Tower.

Sara Murray, let's begin with what we've learned today, please, on Don, Jr., and his role with the secretary of interior pick.

SARA MURRAY, CNN CORRESPONDENT: Well, we do know that Don, Jr. was involved in helping to interview some of these candidates that were running for interior secretary. But it doesn't just stop with Don Jr. We know that Eric Trump sat in on one of the meetings between Donald Trump and Mitt Romney. But we're also learning that when Donald Trump does head to the White House, the office that's normally seen as the office of the first lady and called that is going to become the office of the first family, and that's to make way for Ivanka Trump to play a role in the White House. Of course we know that both Jared Kushner and Ivanka Trump are expected to head to Washington, D.C., and to still be advisers to Donald Trump when he's in the White House.

Now, Trump's transition aides have sort of downplayed all of this and said, of course the kids are involved in the transition. We said they would be involved in the transition, so it's no surprise that they may be weighing in on cabinet picks or that they may be sitting in on meetings. But it does raise the question if in particular Eric Trump and Donald Jr., are going to be running the business, is it appropriate for them to be playing a role in picking and helping to pick cabinet secretaries or helping to evaluate cabinet secretaries.

And I think this is one of the questions, you know, we're hoping to get more clarity on when Donald Trump finally does hold this press conference, now one we expect in January, explaining how he's going to unravel his business interests with his interests in Washington. And I think that there are a lot of people, first sitting members of Congress, who are waiting in Washington to see how he's going to do this, Brooke.

BALDWIN: OK, we'll come back to that with my panel.

Let me ask you about a building not too far away from the White House, that being Trump's new Washington, D.C. hotel. We know that according to the GSA, the General Services Administration, you know, if it stays as status quo, he, Mr. Trump, would be in violation of the lease come inauguration day. Explain that to us and what Mr. Trump plans to do about it.

MURRAY: So this is a shiny, sparkly example of a potential conflict that's awaiting Donald Trump once he does get to the White House. If he does nothing now, if he does not divest from his business interest, it's possible he will run afoul of the lease that is - that his Washington hotel has been built on.

Now, there are still questions about whether Donald Trump will divest from that hotel, whether he could make changes between now and then and the GSA did put out a statement essentially saying, look, it's premature to evaluate right now whether Donald Trump will run afoul of this lease. But, Brooke, as you said, if nothing changes, it certainly looks like he will.

Again, his aides have been sort of punting on this question today saying, we are trying to work this all out, we are trying to figure it out and trying to be transparent in how we're going to unwind Donald Trump's White House from Donald Trump's business interest, but these are not answers that we're expecting to get by the end of this month, Brooke.

BALDWIN: OK. Sara Murray, hopefully we'll get those answers in January when he holds that news conference, if not before. Thank you.

Let's have a bigger conversation here. Kevin Sheridan is back. He was communications director for Paul Ryan's vice presidential campaign when he ran with Mitt Romney. Maeve Reston is with us, CNN national political reporter.

So good to see both of you guys.

MAEVE RESTON, CNN NATIONAL POLITICAL REPORTER: Hi, Brooke.

BALDWIN: And, Kevin, let me just turn to you and piggyback off of Sara's point on this D.C. Trump hotel. And, again, just to make it clear for you watching, so the issue is, this hotel sits on federal property, so a provision of the deal prevents any elected official - like the president of the United States - from having any piece of the lease. What do you think Mr. Trump should do?

[14:10:03] KEVIN SHERIDAN, FORMER SENIOR ADVISER, ROMNEY-RYAN 2012 CAMPAIGN: Well, his legal team has postponed their announcement of what they're going to do and I think because it's a - it's a complicated issue in general with the entire Trump organization about how they're going to separate - you know, just the hotel is only one piece of it. It's a multiple dollar company and its worldwide. They're going to have to come up with a way to show the American people that there is a real divide between what Donald Trump is doing as president and what his family is doing running the business. I'm confident they will do that. They have an excellent -

BALDWIN: You are confident?

SHERIDAN: I am.

BALDWIN: Yes.

SHERIDAN: They have an excellent legal team.

We're in uncharted territory, though. We don't know exactly what that's going to look like yet. We don't know exactly what they're going to come up with. But I think when they finally announce it, I think there will be a real separation and I think the American people will know - look, the American people just voted and they voted for a guy who has a multibillion dollar, multinational company. They knew that. They know he's got a family that's involved in all of it. They voted on it. He won.

BALDWIN: Maeve Reston, on the family being involved, thank you, tomorrow would have been the day - tomorrow's the 15th, right? Tomorrow would have been the day when, you know, initially Mr. Trump said he would come out and hold this news conference and we could ask questions. That's scrapped. Apparently that's supposed to happen in January. Part of that conversation now is with Don Jr. and his involvement apparently in, you know, making phone calls and being part of the interview process according to sources on this interior secretary position. What - is this blurred lines to you?

RESTON: Yes. I mean it's - it's very much blurred lines. And part of the problem for Donald Trump here is that this is normally the kind of thing that a candidate would address during the campaign and explain to voters, you know, how he's going to separate himself from his businesses and, you know, to what extent his children will have a role. He really wasn't very clear about exactly how this would all play out and I think the delay in the press conference only is sort of heightening these questions about conflicts of interest.

You know, if you -

BALDWIN: What if the Trump team says it's really, really complicated, we're working on it, it's just taking a little bit more time. Slow your role, it will happen in January.

RESTON: Right. Well, I mean -

BALDWIN: Is that good enough?

RESTON: Yes, that's what they should have been working on, the transition team, over the last, you know, six to eight months as they were planning for a potential Donald Trump presidency. And I think that there are a lot of people that feel comfortable with the fact that, you know, Ivanka was in on the meeting with the prime minister of Japan, for example, and no one really knows exactly how much advice Donald Trump is getting from his children behind the scenes on which picks to go for.

And there is, you know, they do have a huge interest in this. They obviously have properties all over the world and he's going to face a lot of thorny questions on this. And I think that the public is waiting for more clarity on how he's going to create whatever Chinese wall he's going to create. And it needs to go beyond saying, I'm just not going to talk to my kids about the business deals they're making.

BALDWIN: Well, just quickly on the talking to the kids bit. Apparently Don, Jr., did this interview with his "Outdoor" magazine and he said this, quote, "the big joke at Christmas this year was that the only job in government that I would want is with the Department of Interior. I understand these issues. It's something I'm passionate about. I will be the very loud voice about these issues in my father's ear. No one gets it more than us."

So, you know, to Kevin and then we're going to finish talking about Don, Jr., but you can understand people are saying, well, hang on a second, if you're a loud voice in the room but you're supposed to run your dad's company, which we're officially waiting on word in January, what are we supposed to think?

SHERIDAN: Well, to that interview specifically, because I did read it.

BALDWIN: Yes.

SHERIDAN: I think it sounds to me like he knows what he's talking about with - you know, use of federal lands for hunting and fishing. He's a passionate outdoorsman. And, you know, he's going to offer his opinion. Donald Trump, you know, the buck stops at his desk. He's the president and he'll have to take in all opinions from all sorts of people, including his family. And I don't know that he's -

BALDWIN: Except if his son is running his business.

SHERIDAN: But he's not - you know, he wasn't advocating for something specific about his business, you know, from that.

BALDWIN: Yes.

SHERIDAN: From that opinion. So I think that's fine. I don't think - look, you know, presidential families are always going to have the opinions - you know, have their opinions around the dinner table.

BALDWIN: Yes.

SHERIDAN: They're going to be able to get their voice in there. Hillary Clinton did it with Bill Clinton. Everybody is going to have their voice.

BALDWIN: Yes.

Let me move on to your former boss, Wisconsin here, and House Speaker Paul Ryan. Donald Trump was on his thank you tour in Wisconsin and likened your former boss to a fine wine. Roll the clip.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT-ELECT: Speaker Paul Ryan, I've really come to - oh, no, I've come to appreciate him, Speaker Paul Ryan. Where is the speaker? Where is he? He has been - I'll tell you, he has been terrific. And, you know, honestly, he's like a fine wine. Every day goes by, I get to appreciate his genius more and more. Now if he ever goes against me, I'm not going to say that, OK.

(END VIDEO CLIP)

[14:15:00] BALDWIN: OK, so, yes, so it's a fun sound bite. But, Kevin, I think really and I want to point to what we heard, some cheers, some boos. As you well know, this is Speaker Ryan's home state. Is that - that's not a great thing for the speaker of the House and do you think Mr. Trump enjoyed that?

SHERIDAN: No. No, it's fine. Look, the Republican Party - if you talk to Republicans in Washington or Republicans out in the states, original Donald Trump supporters or people who were reluctant to support him and who ultimately did, everyone's very excited right now. We've got a very good cabinet already in place. We've got a hundred -

BALDWIN: Why were there boos?

SHERIDAN: You have a 100-day agenda that's coming together. Mike Pence is working closely with Paul Ryan right now. They're getting that done. You're going to see real progress, real results in the new Congress. This is an exciting time to be a Republican. Soo it's -

BALDWIN: It is a different tone from some months ago when we were talking - we were looking at the relationship between Trump -

SHERIDAN: Who would have guessed it, but it's an exciting time to be a Republican.

BALDWIN: OK. One more for you, Maeve.

RESTON: Well -

BALDWIN: Go ahead, Maeve, jump in.

RESTON: I mean but let's also think about the fact that Paul Ryan is a potential successor to Donald Trump in the White House. I mean this is going to be a very interesting dance over the next year where there probably will be times when - I mean we're sure there are going to be times when Congress and Donald Trump are not going to agree on the issues and Paul Ryan's been very careful in navigating that so far. But there were a lot of people that were hoping that he was going to run in 2020 against Hillary Clinton, you know, making the assumption that she was going to win. He raised an enormous amount of money this year. He is clearly, you know, a rival for Trump potentially if Trump's presidency blows up into smithereens. So I think that, you know, that that's a really interesting relationship to watch over the next year.

BALDWIN: It is. Agreed.

RESTON: And clearly Donald Trump was warning something there.

BALDWIN: Agree. Maeve and Kevin, thank you very much.

RESTON: Thanks.

BALDWIN: Just ahead, who is the most powerful person in the world, Vladimir Putin or Donald Trump? "Forbes" releasing its list with a couple surprises.

Plus, new video and emotional testimony here in the trial of this racist man behind the Charleston church shootings. Why the defense rested so quickly. And breaking news, thousands of people, innocent families trapped

right now as a cease-fire in Aleppo has collapsed. Hear what's happening on the ground from someone who's been there.

You're watching CNN.

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BALDWIN: I want to take you straight to Trump Tower and listen in on Donald Trump and leaders in the tech industry around this round table.

DONALD TRUMP (R), PRESIDENT-ELECT: Asking to come to this meeting. And I will say Peter was sort of saying, no, that company's too small and these are monster companies. But I want to thank - I want to start by thanking Peter because he saw something very early, maybe before we saw it, and of course he's known for that in a different way. But he's been so terrific and so outstanding and he got just about the biggest applause at the Republican National Convention. He's ahead of the curve. And I want to thank him. And you're a very special guy.

So I want to add that I'm here to help you folks do well. And you're doing well right now and I'm very honored by the bounce. They're all talking about the bounce. So right now everybody in this room has to like me at least a little bit. But we're going to try and have that bounce continue. And perhaps even more importantly we want you to keep going with the incredible innovation. There's nobody like you in the world - in the world. There's nobody like the people in this room.

[14:20:13] And anything we can do to help this go along, and we're going to be there for you and you'll call my people, you'll call me, it doesn't make any difference, we have no formal chain of command around here. I'm honored to have Gary, the president of Goldman Sachs, (INAUDIBLE) Goldman Sachs to do this. And, Wilbur, everybody knows Wilbur, they never call him Wilbur Ross on Wall Street, they just say, "oh, it's Wilbur." And there's nobody like him.

And we're going to do fair trade deals. We're going to make it a lot easier for you to trade across borders because of a lot of restrictions, a lot of problems that I think you'll see and if you have any ideas on that, that would be - that would be great because there are a lot of border restrictions and a lot of border problems. You probably have less of a problem than some companies, some companies have - you have some problems. (INAUDIBLE).

BALDWIN: All right, so that's what we got was the tech Trump round table there. You know, chiefs of Amazon, Google, Oracle and the like all sitting around that room. Basically the net worth in that room, probably close to $100 billion.

I should also note, though, of course as they're talking jobs, many of whom have been very critical of then-candidate Trump, jobs, trade, I should point out the head of Twitter not in the room.

We're back with our breaking news out of Syria. Civilians who are still inside of Aleppo have just been told they will no longer be able to escape, at least for now. A cease-fire has collapsed just hours after it went into effect. The

deal, it was struck between the rebels and the pro-government fighters, was aimed to get the families, these women and children, away from the fighting. But now we're getting reports of new shelling, leaving an estimated 50,000 people trapped in a war zone, many pleading with the world to help them.

Let me show you just the latest tweet from a mother of that seven- year-old girl in Aleppo named Bana al-Abed. She and her family have been documenting their struggle just to survive. The mother writes, "dear world, there's intense bombing right now. Why are you silent? Why? Why? Why? Fear is killing me and my kids."

I want to bring in Clarissa Ward, our CNN senior international correspondent, who has been inside Aleppo.

You have called it hell. You know, we've talked about the cease-fire. But I first just want to ask you, you know, we know people inside Aleppo are badly injured. You've talked about the medical facilities, no resources, no food, no medicine. How do these people live and survive?

CLARISSA WARD, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, at the moment, I think their very survival, Brooke, is really hanging in the balance because what we're seeing now is rockets essentially raining down on Aleppo, on that small part of eastern Aleppo that is still under rebel-held control. And as you said, it's an estimated 50,000 people inside that area. It's difficult to know. Frankly, it doesn't really matter exactly how many are - there are. There are thousands of people. They don't have electricity. They don't have food. Many of them are severely injured. By some reports, the hospitals are filled with dead bodies. They don't know what to do with them exactly.

And I can even speak to just on a personal level, receiving many messages from people inside Aleppo, essentially good-bye messages. People saying, thank you for the work you did here. Thank you for your friendship. I want to say good-bye to you now because I may not get another chance to do it. So there is a very real sense for the people that are trapped in this part of the city that they may not live to see another day.

There was a brief window last night when it looked like this Turkish- Russian brokered truce might take effect. The fighting stopped for a few hours. There were large green buses lined up purportedly to take out civilians from these heavily hit areas and get them into a safer space. That has subsequently crumbled. We don't know exactly why it has crumbled, although there is talk now that the deal may be back on. But as we've seen so many times before, one doesn't want to get one's hopes up when you hear that the deal is on. One doesn't want to fall into a pit of despair when the fighting starting again. But for the people who are inside those areas who are being rained down on with rockets, who have no power, no food, despair is really a tough thing to keep at bay.

Brooke. BALDWIN: Just to think that you are getting - just journalist to journalist - good-bye notes from people from within Syria because they do not think they will be able to live to see another day.

The next question then is about, you know, what this administration has done, right? We know that President Obama, he sat down with Fareed Zakaria for this extensive interview. Fareed asked him how he feels about the U.S. out of the Syrian civil war militarily. Here is what he said.

[14:25:09] (BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think it is the smartest decision from a menu of bad options that were available to us. But do I believe that it would have been a profound mistake for us to wade in and to currently have 100,000 troops or 50,000 troops inside of Syria right now? Do I think that the situation would be better for us? I do not believe so.

(END VIDEO CLIP)

BALDWIN: How do Syrians feel about Obama's decision?

WARD: Well, I think they feel deeply disappointed. They also felt that they were misled. Part of the reason they went out and marched into a hail of bullets carrying signs calling for freedom was because they saw what had happened in Libya and the moral precedent that had been established there by the U.S. and they genuinely believed that the west would come in, in some capacity, if not to actively support them, then certainly to prevent the basically extermination that we have seen take place across the country.

And I think what's a little bit disingenuous about President Obama's statement that you just heard to Fareed there is that essentially he's presenting this as it was either a choice to do nothing, which is the choice the U.S. went with, or it was a choice to send in 100,000 troops and have a full on military intervention, a full-on invasion, if you like. And to people on the ground inside Syria that feels like a false representation. They believe very firmly that the international community could have done more, that a coalition could have been established. We've heard from the Saudis and from the Turks and from the Qataris that they were willing to take on the onus of a ground presence if only they had at least the support of the U.S.

As always with these situations, hindsight is 20/20. Obviously in the fog of war, it's never easy to make these decisions. But certainly on the ground, deep, deep disappointment and bitterness about the U.S.'s lack of involvement, Brooke.

BALDWIN: Clarissa, thank you. Clarissa Ward, she's been there, she knows.

Coming up next, we are just days away from the official Electoral College vote that would seal the deal for a Trump presidency, but more than a dozen electors are considering not voting for Trump, like they're supposed to. (COMMERCIAL BREAK)