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Fed Expected to Order Biggest Interest Rate Hike in Nearly 30 Years; Trump Lawyer Warned John Eastman to Back Off Plans to Overturn Election; Dangerous High Temperatures to Scorch Much of U.S. Today. Aired 10-10:30a ET

Aired June 15, 2022 - 10:00   ET

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

[10:00:05]

OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT: He said and asked whether Ukraine would even exist in two years, Alex and Poppy, strongly suggested of the war crimes of which Russia has been accused.

POPPY HARLOW, CNN ANCHOR: Yes. Oren Liebermann reporting for us in Brussels, thank you, Oren.

It is the top of the hour. Good morning, I'm Poppy Harlow.

ALEX MARQUARDT, CNN ANCHOR: And I'm Alex Marquardt in this morning for Jim Sciutto.

We are closely monitoring the Supreme Court here in Washington this morning. The nation's highest court set to release several opinions beginning right this hour.

HARLOW: That's right. We are expecting some major opinions to come down before the end of the term, either by the end of this month or early July. That includes decisions that would impact access to abortion and conceal carry licenses for guns in this country. We'll bring you all the breaking developments from the Supreme Court as they all happen this hour.

MARQUARDT: That's right. And also this morning, we are following several economic stories. Hours from now, we could potentially see the biggest interest rate hike in decades. Experts believe that the Federal Reserve is poised to hike rates as much as three quarters of a percentage point.

Now, while that may cool inflation, American consumers would feel the impact in many other ways, mortgages, car loans, credit cards and student borrowing would all become more expensive.

HARLOW: Also this morning, in an effort to drive down these historically high gas prices, the Biden administration is putting pressure on big oil companies to come up with, in their words, quote, concrete ideas to lower rising costs. We are following all of that.

Also, new details from the January 6th committee, tomorrow's hearing on the insurrection will focus on former President Trump's pressure campaign on then-Vice President Mike Pence to block the certification of the election. Vice chair of that committee, Congresswoman Liz Cheney, teasing ahead to tomorrow's hearing releasing a portion of a taped deposition with former Trump White House Lawyer Eric Herschmann, listen to this, warning then-Trump Attorney John Eastman not to interfere with the transition. Watch.

(BEGIN VIDEO CLIP)

ERIC HERSCHMANN, TRUMP WHITE HOUSE ATTORNEY: I said, I don't want to hear any other f'ing words coming out of your mouth no matter what other than orderly transition. Repeat those words to me.

UNIDENTIFIED MALE: What did he say?

HERSCHMANN: Eventually, he said orderly transition. I said, good, John. Now, I'm going to give you the best free, legal advice you're ever getting in your life. Get a great f'ing criminal defense lawyer. You're going to need it.

(END VIDEO CLIP)

HARLOW: We will have much more on that in just a moment.

Let's begin though with the economy. Today, the Fed expected to hike interest rates the most in nearly 30 years. Our Matt Egan is with us, John Harwood at the White House, Alison Kosik at the New York Stock Exchange.

Matt, to you first. So, if the Fed raises rates, 75 basis points, three quarters of a percent, it's going to be the biggest hike since '94, and it's also, I think, notable that they didn't think they'd have to do it by that much just a week ago.

MATT EGAN, CNN BUSINESS REPORTER: That's right, Poppy. So, for consumers, this means higher borrowing costs, mortgages, credit card debt, student dent, car loans and, hopefully, lower inflation, eventually. The Fed is debating truly aggressive steps to try to get inflation under control. Justin the last few days, we have investors and economists who are now expecting the Fed going to raise interest rates by three quarters of a percentage point.

As you mentioned, we haven't seen anything like that since 1994. And just six months ago, there was a legitimate debate about whether or not they would raise interest rates by that much all year. Now, they're doing it in a single meeting.

So, what does all of this mean? Well, I think if you imagine that the economy is a car, cruising along the highway, the Federal Reserve is the driver of the car. When the car slows down, the Fed tries to speed things up by hitting the gas, lowering interest rates, makes it cheap to borrow. That's what they did in March 2020.

Now, we have the opposite situation. The car is actually going way too fast. Prices are on fire. And so the Fed actually has to slow things down. They would prefer to tap the brakes on the economy by gradually raising interest rates. That's what they did in 2015 through 2019, but they don't have the luxury this time. They have to slam the brakes on the economy.

And I think the problem here for the Fed is if they do too little, then inflation goes out of control. If they do too much, they risk causing a recession. This is not going to be easy.

MARQUARDT: And, John Harwood, to you at the White House. We did hear from the energy secretary, Jennifer Granholm, who says that President Joe Biden will be demanding that oil companies help to lower these high gas prices. How exactly would that work?

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well, it isn't going to amount to all that much, I would think, Alex. This is a gesture by the president because he's facing pressure on inflation, gas prices specifically, at a moment where he can't do all that much about it.

[10:05:01]

It's the Federal Reserve's job, as Matt was indicating, to control inflation. And on gas prices, we've got a free market economy. The price of oil is set on a global market, very limited levers the president has to influence that. He's tried to release oil from the Strategic Petroleum Reserve. He's doing a million barrels a day. That's not having all that much effect when you consider all the other pressures on the world market.

And so since he's feeling pressure as a political leader, he's trying to make some gestures to indicate to the American people that he is hearing their complaints and trying to do something about it. So, he sends a letter to the oil company saying, we want to increase refining capacity. He's concerned about the level of profits that oil companies are making, but he's not committing to any particular action.

Here's Jennifer Granholm, the energy secretary, this morning on her description on what the president is indicating.

(BEGIN VIDEO CLIP)

JENNIFER GRANHOLM, ENERGY SECRETARY: No tool has been taken off the table and he wants to hear from the refineries, the companies who are doing refining to see what is the bottleneck and how we can increase supply. And he's also asking, of course, for the oil and gas industry to increase supply as well by drilling more.

(END VIDEO CLIP)

HARWOOD: So, she says nothing has been taken off the table but the president is not taking any action either other than issuing this letter. He'll see what response he gets from oil companies but I think you have to look at this in the context of politics, the pressure the White House is feeling and the need to do something, even if it's not going to make a big difference in the short-term price of oil.

HARLOW: John, just to follow-up to you on that, how does the White House square, asking these oil companies to really change their behavior and change from what the administration had wanted, which is more of a green energy future, to doing this now to address the current crisis when they know, you know, years from now, that won't be the need? Do you see what I'm saying? It seems like they're completely changing strategy.

HARWOOD: I see that's exactly what you're seeing, Poppy, and this is one of the challenges when you make a transition from one kind of energy source to another. You have a conflict between the immediate needs of the American people and the long-term needs of the economy, the global economy, and the climate. And that's the challenge that they're trying to respond to in the short-term by taking care of these price pressures without interfering more than the administration would like to on the long-term transition toward a greener energy source.

HARLOW: Yes. So, Alison, you're at the New York Stock Exchange. Markets pointing higher this morning, why?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, you know what, there is a real sense here on Wall Street that the Federal Reserve today is going to go ahead and play catch-up because it kept interest rates too low for too long. And it's something that really hit home after we got that inflation report on Friday showing that inflation is accelerating. So, despite Fed Chair J. Powell in May saying he wouldn't raise rates more than half a percent, there is widespread belief here today on Wall Street that the Fed misjudged the hot inflation environment, it misjudged the market reaction. We are seeing stocks in a bear market.

And today, the expectation is that the Fed could actually get tougher on inflation and raise rates three quarters of a percent, and as you mentioned, that is a rare event. Last time it happened, it was 1994 with Allen Greenspan at the helm. So, never mind that Powell took the higher rate off the table. This is what I'm hearing investors want to see happen today. It's what they believe can keep the market from selling off more. And if the Fed today doesn't raise rates at a bigger clip, the market is hoping the Fed telegraphs that more aggressive rate hikes are coming down the line which we would hear in the forecast. Poppy?

MARQUARDT: All right. We'll all be watching closely. Thank you very much to John Harwood, Matt Egan and Alison Kosik.

Now, the January 6 select committee is having their next hearing tomorrow. That is expected to focus on the pressure that was put on then-Vice President Mike Pence to refuse to count lawful electoral votes.

HARLOW: So, we know some of what's coming because has committee released a video clip from its deposition of Trump Campaign Attorney Eric Herschmann. And in this clip, he talks about a conversation he had with right-wing attorney for the president, John Eastman, who is trying to help former President Trump block the 2020 election results. Listen to this.

(BEGIN VIDEO CLIP)

HERSCHMANN: I said, I don't want to hear any other f'ing words coming out of your mouth no matter what other than orderly transition. Repeat those words to me.

UNIDENTIFIED MALE: What did he say.

HERSCHMANN: Eventually, he said, orderly transition. I said, good, John. Now, I'm going to give you the best, free legal advice you're ever getting in your life. Get a great f'ing criminal defense lawyer. You're going to need it.

(END VIDEO CLIP)

HARLOW: That's just a preview.

Joining us now, CNN Chief Legal Analyst Jeffrey Toobin, CNN Anchor of Inside Politic Sunday Abby Phillip.

Jeffrey Toobin, so we just heard Herschman, who was a White House lawyer at the time, warning Eastman who was trying to perpetuate the lie, right, and trying to help the president block the results. That's an insider from the White House at the time saying that, which is just remarkable to hear. How significant is it?

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: Well, one of my favorite things about the video is in the background, there's a baseball bat with the word, justice, on it. And I think that's a pretty good description of Eric Herschmann. I mean, Eric Hesrchmann, there you go, is a ferocious partisan Republican. I mean, this is not Adam Schiff talking about Donald Trump. This is a very tough Republican lawyer saying to another Trump lawyer, you should be worried about going to prison, about what you're doing. So, I think it is highly significant in real-time as a perspective on how outrageous the behavior was around President Trump.

Now, is it proof that John Eastman committed a crime? Of course not, but it is just indicative of how outside the mainstream, how weird, how controversial the actions were, even among tough Republican partisans.

MARQUARDT: And, Abby, as we mentioned, tomorrow's hearings are going to focus on this pressure campaign on Vice President Mike Pence. How important is it for the committee to show the full picture of the amount of pressure that was on Pence and the complete disregard that his boss, the president had, for his safety, for his life?

ABBY PHILLIP, CNN SENIOR POLITICAL CORRESPONDENT: Yes. I mean, I think this is actually going to be one of the more significant presentations that they have to make here by the committee. The bottom line is that the people around the president wanted Pence to knowingly violate the law. And I think that that's kind of the undercurrent of the Herschmann comments to John Eastman, is that it was clear to him that the people who were pushing this cockamamie plan knew that it was a violation of the law and were doing it anyway. They wanted Pence to do things that there was absolutely no authority to do.

And then on top of that, on the day of January 6th when violent erupted, the president reportedly said, according to the committee, that Pence deserves it when people were chanting, hang Mike Pence. I think it's two stories. One, it's about people who knew that they were trying to subvert the Constitution, and it's also a story of Trump not carrying out his duties as president of the United States.

HARLOW: Very well put, Abby. And just building on that, Jeffrey, a very well respected, well known conservative retired federal appellate judge, Michael Luttig, according to Liz Cheney, has indicated, and this will come more of it in the hearing, that the pressure put on Pence by the former president likely violated two federal statutes. Can you -- go ahead.

TOOBIN: No. I mean, Michael Luttig is someone very famous within legal circles. As a young lawyer, he was the lawyer in the George Herbert Walker Bush administration who pushed Clarence Thomas through the nomination. He was Thomas' closest adviser. He came this close to being nominated to the Supreme Court by George W. Bush for the seat that went to Samuel Alito. I mean, this is a hardcore respected, very conservative former appeals court judge. So, he's not just some random person with an opinion.

And, you know, it all goes to the question that Abby was talking about which is the state of mind of the people involved, starting with former President Trump, which is, were they making a good faith argument that turned out not to be supported by the courts or supported by Mike Pence, you know, just a losing legal argument, or were they intentionally violating what they knew to be the law and the facts in an attempt to stay in office illegitimately? That question of intent, did they know they were violating the law?

Every day in this hearing is about that question. And tomorrow will certainly be a major milestone in discussing it as well.

HARLOW: Yes, no question. Jeffrey Toobin, thank you. Don't go far, okay, because we've got more opinions to come down from the court.

TOOBIN: Okay.

HARLOW: Abby Phillip, thank you very much.

Still to come, dangerous heat across the Midwest leaving more than 200,000 people in Ohio without power. And in Montana, floods sweeping away roads and homes, shutting down part of Yellowstone National Park.

[10:15:04]

We're live with a look at, really, this extreme weather impacting millions.

MARQUARDT: Plus, right now, FDA vaccine advisers are discussing COVID vaccines for kids under five years old. But will we see parents rushing out to get the shots if they get the green light?

And Russia says that it is planning to reopen the Mariupol drama theater just months after so many innocent Ukrainians were killed while they were seeking shelter in that theater. What Mariupol's mayor is saying about that plan, just ahead.

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MARQUARDT: Dangerously high temperatures are expected to scorch much of the U.S. today with some areas seeing temperatures as much as 20 degrees above average. Many in Ohio will have to suffer through that heat without air conditioning. Storms have knocked out power to 130,000 people in Ohio. One power company saying that electricity may not be back up until tomorrow.

HARLOW: Our Meteorologist Derek Van Dam joins us from Columbus, Ohio, with the latest. I mean, this could be a deadly situation.

DEREK VAN DAM, CNN METEOROLOGIST: Yes. Indeed, Poppy. The time is literally ticking along here because without power, the heat is on, right? This is a deadly combination of no electricity and an impressive heat wave that is just raging across parts of the Midwest all the way down to the gulf coast areas.

It has literally never been this humid within the city of Columbus, Ohio. And I mean that because they actually set a record yesterday measuring 84 degrees, their dew point, and that's never been done. They also set a record minimum low temperature for the city, where I'm located now.

And you could imagine what that equates to for people who don't have access to electricity or air conditioning. It becomes incredibly, incredibly stifling hot within your home. In fact, I came up across some individuals in the apartment blocks behind me and I want you to hear from them just how hot it got and what they did to stay cool.

(BEGIN VIDEO CLIP)

VAN DAM: So, this is how hot it is inside your house?

KRYSTAL LOVE, COLUMBUS, OHIO RESIDENT: Yes, it's reading about 89, 88 right now.

We were literally trying to cool off, trying to breathe. Like it was too hot to just sit down in our house.

(END VIDEO CLIP)

VAN DAM: Excessive heat alerts span over really 100 million Americans today and thousands of people across Ohio actually face multiple days without electricity. We're already going on 36 hours without access to electricity. These are some of the fortunate ones, as we drove up to this location, their electricity literally came on. They were so happy to see and hear the hum of the air conditioners as well.

But, remember, heat impacts people disproportionately. We know these excessive heat waves impact lower income areas, first and foremost, because they may not have access to air conditioning in the first place. But this heat wave, because of the lack of electricity, is an equal opportunity heat wave, right? So, everybody is without electricity here for the most part, about 200,000 customers within the state of Ohio as we speak. So, most people who are used to having that air conditioning may not have it. So, it's not even the hottest time of the year yet, Poppy, and we are already reaching triple-digit temperatures in terms of heat index. We are stressing the electrical grid. We are in this for the long haul.

HARLOW: Okay, we appreciate you and your team on the ground, Derek, bringing us important information. Derek Van Dam reporting for us.

Yellowstone National Park still temporarily closed still to visitors and park officials say the northern portion in particular may stay that way for a substantial period of time because of the dangerous flooding we're seeing in Montana and Wyoming.

MARQUARDT: These are just incredible images

CNN's Nick Watt joins us live now from Yellowstone National Park with the latest. Nick, we've seen so much of the damage. How bad is it where you are?

NICK WATT, CNN NATIONAL CORRESPONDENT: Well, Alex, the real key here is what has been damaged. There is one road into the park here from the north and that road used to run along the side of the Yellowstone River and it has been washed away in multiple places. Park officials say that could take months to repair. This northern part of the park could be closed for the rest of the season.

Now, what happened here is there was a very late dump of heavy snow, then early warm high temperatures which melted some of that snow, coupled with heavy rainfall and this, the Yellowstone River, rose to record all-time highs, about three months worth of water, as we reckon, coming down this valley in the space of just three days.

Now, Jim, if you pan around here where I'm standing, I'm standing back from the river bank because this bit here, this was a home for national park workers, and it was washed away, fell into the river and is gone.

Now, there are still some that country groups in the park. The whole park is closed. They've made contact with park officials. Apparently, they're not in any immediate danger. We've already seen lots of people brought out of the park to gardener. They were being helicoptered north. The road north is now open. It's possible open only for essential travel like evacuation.

Now, the issue is, this may not be over because there's still about 12 inches of snow pack up there and the forecast for the weekend is high temperatures even up to altitude, maybe 60, 70 degrees.

[10:25:13]

So, more of that snow could melt and come down the Yellowstone River and cause even more damage.

But it is incredible to think that the oldest national park in America, 150 years old, more than 2 million acres, is now closed to the public. The south and west might open sooner but the north is going to be months, months. Guys? HARLOW: Months, wow.

MARQUARDT: So many summer plans potentially dashed. Nick Watt at Yellowstone National Park, thank you so much.

HARLOW: Thank you, Nick.

Well, ahead, she is the history-making head of the largest union organization in America, and, next, AFL-CIO President Liz Shuler joins us to talk about President Biden's speech. There she is with the president yesterday, and everyone's growing concerns over inflation.

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