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Fed Raises Interest Rate By 0.75 Percent, Biggest Hike Since 1994; FDA Advisers Vote In Favor Of Authorizing Moderna COVID Vaccine For Children 6 Months To 5 Years Old; Nearly 100 Million In U.S. Swelter Under Heat Warnings, Advisories; 1/6 Committee Has Footage That Challenges Police Findings Over Alleged Role Of GOP Congressman. Aired 3-3:30p ET

Aired June 15, 2022 - 15:00   ET

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

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[15:00:39]

VICTOR BLACKWELL, CNN HOST: Top of a brand new hour on CNN NEWSROOM, good to have you. I'm Victor Blackwell.

The Federal Reserve just announced its biggest interest rate hike in 28 years. It went up by three quarters of a percentage point, marking the Central Bank's most aggressive move yet to try to bring down the soaring costs of food and gas and almost everything else. And inflation, it's not easy, just days ago, we learned it's at the highest level since 1981. The Fed also just released some darkening forecast, projecting more inflation and higher unemployment.

Joining me now CNN Reporter Matt Egan. So we just heard from the Fed Chairman, he signaled more rate hikes. What did you learn?

MATT EGAN, CNN REPORTER: Well, Victor, clearly inflation is on fire and today the Federal Reserve officially called in help for some reinforcements, taking these aggressive steps to raise interest rates and Fed officials are signaling that even more aggressive steps may be needed to get inflation under control. Listen to what Jerome Powell just said.

(BEGIN VIDEO CLIP)

JEROME POWELL, CHAIRMAN, FEDERAL RESERVE BOARD: We anticipate that ongoing rate increases will be appropriate. The pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy. Clearly, today's 75 basis point increase is an unusually large one and I do not expect moves of this size to be common. From the perspective of today, either a 50 basis point or a 75 basis point increase seems most likely at our next meeting.

(END VIDEO CLIP)

EGAN: The Fed officials sharply raise their projections for interest rates going forward. They're now predicting interest rates will be around 3.4 percent at the end of the year. That's about double where they are today, so much higher. And I think it's worth noting that this was not the plan that Jerome Powell drew up six months ago or so, that he prefer to raise interest rates gradually. So it's not to do too much disruption to the economy, but they haven't had that luxury because inflation is just so hot right now that they've had to take even more aggressive steps than they had planned, Victor.

BLACKWELL: Matt Egan at the Federal Reserve, thank you very much.

CNN Business Correspondent Alison Kosik is at the New York Stock Exchange. Alison, it was up and then down and then up and then down, where is it now?

ALISON KOSIK, CNN CORRESPONDENT: Yes. Right now we're seeing green arrows across the board. I think the market is adjusting to what Fed Chair Jay Powell is saying. Right now he's in the middle of his press conference. But the Fed's decision really come in line with what the market wanted. There had been this growing chorus of economists, analysts and traders calling for Jay Powell to just get tougher on inflation and Powell looks to have done that today by raising interest rates by a full three quarters of a percent.

So it looks like the Fed is responding to amaze hot inflation number, something that really was the last straw for the S&P 500 to enter a bear market. It's down 20 percent for the year. The NASDAQ has been in a bear market as well. It's down 30 percent. And many have been saying that Powell has been behind the curve and slow to react to rising inflation, that's been hitting consumers from the grocery store to the gas station.

Now, of course, there's the concern about the Fed needing to get this right Victor. The Fed is in the middle of this delicate dance, how to bring down inflation without driving the economy into a recession by hiking rates too much. Victor?

BLACKWELL: Alison Kosik at the New York Stock Exchange, thank you very much.

Joining me now is former Economic Adviser to President George W. Bush, Douglas Holtz-Eakin. He's also the President of the American Action Forum. Douglas, good to see you again. Let's start here with just your reaction to this 75 basis point increase.

DOUGLAS HOLTZ-EAKIN, CHIEF ECONOMIST, WH COUNCIL OF ECONOMIC ADVISERS UNDER PRES. GEORGE W. BUSH: Well, I thought you could make the case for either a 50 or 75-point move. The case for a 50-point move is that that was the plan and the Fed wants to convey the message that it understands the problem. It has a plan and sticking to his plan and will take on inflation.

The case for 75 is the data have been hotter and they've always said they would respect the data and adjust accordingly and they did that. So I think of the two choices, being aggressive in the face of an aggressive inflation problem is the right one and now we just see how many times they have to go 75.

[15:05:00]

The Chairman signaled they might do that again at the next meeting.

BLACKWELL: Yes. You think this decision makes a recession in the next year or two any more or less likely?

HOLTZ-EAKIN: No. We're having an elevated risk of a recession. Anytime the Fed is trying to combat inflation, historically, its ability to slow the economy enough to get the inflation under control, but not to get it to go into negative territory has been a bit dicey. So they're trying to do that one more time in the face of a lot of uncertainty coming out of Ukraine, with the tail legs (ph) of the pandemic and with China, that's a hard problem. So 50 or 75, the risks are still the same next year one way or the other.

BLACKWELL: For people who - I'm trying to deliver this to people sitting at home - don't deal specifically ...

HOLTZ-EAKIN: Right.

BLACKWELL: ... they're not applying for a mortgage, Peggy in payroll. She's been married for 20 years, owned her house for 15. She's got two kids at home, not a lot of credit card debt. What this - does this mean for her and for her family?

HOLTZ-EAKIN: I think the right thing to recognize here is that once you let inflation get entrenched in the economy, and we've done that, you really have no good choices. You either live with the inflation. And Victor, you know how much people are struggling with this and ...

BLACKWELL: Yes.

HOLTZ-EAKIN: ... they don't want to live with this inflation, or you do things to control the inflation. That mean higher costs for mortgages, higher costs for auto loans, higher costs for any kind of credit that you're going to have in the economy. Every month, you're going to hear job reports that aren't as good as they used to be housing reports that aren't what they used to be, retail sales that aren't as strong as they used to be. That doesn't feel so great either.

So you're picking between these two evils in order to get in the long run the inflation out of the system and the ability to grow more rapidly. But that's not of this year phenomenon. That we're going to take a year or two to get through this.

BLACKWELL: Talk to me about stagflation; so high inflation, slow growth, but also high unemployment.

HOLTZ-EAKIN: Yes.

BLACKWELL: Now, unemployment is not high right now, but the forecast from the Fed is that it could tick up. So this latest survey from Bank of America, their survey shows investors fear stagflation. Their fears are higher than they have been at any point since the 2008 financial crisis. Do you think that's warranted?

HOLTZ-EAKIN: Well, I grew up with the stagflation of the '70s and the '80s. That was the beginning of my career as an economist. And the key difference between that era and now has to do with expectations of inflation. In the '70s, inflation was high on a sustained basis. People were counting on inflation every year. They were writing it into contracts. There were cost of living adjustments.

And as a result, you got high inflation whether the economy is growing well or not and we had some recessions, they show combinations of inflation and recession, really bad economic circumstances. What the Fed is trying to do right now is prevent that inflation expectation from getting ingrained in the economy. They want people to get the message that they're taking this on and then you get to 2024, you're not worried about inflation anymore. It's in the rearview mirror and you're going back to living your life the way you used to. That's the key for their success.

BLACKWELL: Let me slip one more in here on oil companies. There's this support in the Senate, this proposal from Sen. Wyden on Asertax (ph), 21 percent on excessive profits of the oil companies. Do you think that's a good idea and could that backfire?

HOLTZ-EAKIN: Again, this is history repeating itself. We put in Windfall Profit Tax in 1980. It was a spectacular failure. It depressed oil production in the United States. It did not raise any real revenue. It did not solve the high price of oil problems. So I don't think this is the right way to go. It's always, I think, tempting to demonize oil companies when things are bad. But substantively, that's not going to change global oil markets, which are where the problem resides.

BLACKWELL: Douglas Holtz-Eakin, always appreciate the perspective. Thank you.

HOLTZ-EAKIN: Thank you.

BLACKWELL: All right. Moments ago, FDA vaccine advisors voted in favor of authorizing Moderna's COVID vaccine for children as young as six months old. Let's get down to CNN Senior Medical Correspondent, Elizabeth Cohen. All right. So what do you know?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Victor, this is very exciting news for parents with young children. This is the next step along the way. Now, we'll wait to see if the FDA authorizes it and we'll wait to see if the CDC green lights it. We expect both to happen and we expect both to happen quite quickly.

So let's take a look at the Moderna vaccine for these very young children. So we're talking about children six months to five years old. What they found that when they looked at the children's blood who got this vaccine, their antibody response was as good as adults. That's good, but that's not the ultimate test.

The ultimate test is what happens when you give it to children and compare it to children who got a placebo. Give them some time see who gets sick. What they found is for two to five year olds the vaccine was 36.8 percent effective at preventing children from getting symptomatic COVID. [15:10:05]

For the six-month-old to the 23 month old group, it was 50.6 percent effective.

Now, we are used to seeing numbers like, say, 95 percent effective. These numbers are not wow numbers, I'll just be honest. But parents need to keep this in mind. That's at preventing children from getting symptomatic COVID. There is good reason to think it would be much more effective at preventing your child from getting so sick with COVID that they end up in the hospital or preventing your child from dying.

So that's what we're really trying to prevent is hospitalization or death and those numbers are likely much better than the numbers that you just saw there, which is just keeping your child from getting COVID and getting some symptoms. So let's take a look at another aspect of it.

So we know that this is given in two doses, four weeks apart, and the dosage for these little children is much lower, it's 25 micrograms. When you talk about older children, ages six to 11, it's double that. When you talk about children 12 plus years, it's four times that, it's 100 micrograms.

So this is different than the adult vaccines, much smaller doses. And I've saved the most important thing for last, which is that it was found to be safe when they did this trial with 6,000 children, they found that it was safe. So parents are really urged to get this because while most children don't get very, very sick with COVID, especially now with Omicron, you never know if your child is going to be the one of the ones who does get terribly sick and end up in the hospital or worse. Victor?

BLACKWELL: Yes, very important point there, Elizabeth. I mentioned a few minutes ago this breaking news that Dr. Fauci has now tested positive for COVID. What can you tell us?

COHEN: So first of all, we wish him the best. We are told that he has mild symptoms and that he is working from home. So mild symptoms, working from home, he's had - he's fully vaccinated. He's had two boosters. The odds are we know that he is over 65, so we know that that, of course, puts him at a higher risk.

But still, even people his age usually do very, very well with COVID, especially the Omicron variants. So we're told right now, his symptoms, very mild. Victor?

BLACKWELL: Well, that's good news. And I think Dr. Fauci would probably tell you that he's well over 65, I think he's in his 80s.

COHEN: Yes.

BLACKWELL: So - yes.

COHEN: Yes, he is.

BLACKWELL: I know you were trying to be generous, I appreciate it.

COHEN: Right.

BLACKWELL: Elizabeth Cohen, thank you very much.

COHEN: Thanks.

BLACKWELL: All right. Let's turn now to the Buffalo mass shooting suspect will now face federal hate crime charges. We've got details ahead.

And record heat is scorching parts of the U.S. including Ohio, where temperatures are hovering around 108 degrees right now. We're live in Columbus, next.

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BLACKWELL: Nearly 100 million Americans are living under record breaking temperatures right now. Excessive Heat warnings are testing these power grids. Some schools are releasing summer school students early or just canceling classes altogether.

In Central Ohio, 10s of thousands of people there, they lost power. Derek Van Dam is at a splash pad in downtown Columbus, Ohio. Heat index supposed to climb near 110. I see scores of people behind you there.

DEREK VAN DAM, CNN METEOROLOGIST: Well, here's proof. Right now, the actual ambient air temperature 100 degrees, the heat index (ph) value what it feels like on your skin nearing 108, that is incredible. Right now families across Central Ohio, where I'm located, are being forced to make that difficult decision, do I ride this power outage and heatwave out at my sweltering home or apartment or do I come here or make alternative accommodation options? Because literally time is ticking.

Because once the power is out, the heat is on, because we have this recipe for a disaster here. A massive heatwave coinciding with power outages from storms that occurred on Monday evening. So we're going on 36 hours for some of the residents here without power, without ability to cool themselves adequately as well as the food within their refrigerators and freezers. There's also some speculation from local residents here in Columbus, Ohio about who actually has electricity now.

AEP directly behind me that is the power provider here in central Ohio, talks about how the impacts of the storms and the recent power demands from this heat wave has actually caused their transmission lines to become overloaded and that required emergency outages. But they're saying and I quote, "We're not picking and choosing the locations where these outages are occurring. It's strictly a location by geography, by transmission outage that impacted these stations by the transmission outage." So that just gives an idea of what they're dealing with and what

they're contending here. It is sweltering hot. Record breaking dew points set in Columbus Ohio yesterday of 84 degrees and that means homes can't adequately cool overnight to keep you cool at home. I talked to a resident in Columbus about what it felt like in his home. Take a listen.

(BEGIN VIDEO CLIP)

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

KRYSTAL LOVE, COLUMBUS RESIDENT: Yes. We're in 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: As I look around, there are a significant more adults in the background than just kids playing around in the splash pad. We are nearing the maximum heating of the day as the sunshine comes out in full impacts. But listen, the heatwave of this middle of the month of June isn't even the hottest time of the month and we're already stressing our electrical grid.

[15:20:07]

We are in this for the long haul, Victor. And so are the residents here in Columbus, Ohio, back to you.

BLACKWELL: Yes. That heat is not just uncomfortable. It's dangerous. Derek Van Dam there for us in Columbus.

VAN DAM: Yes.

BLACKWELL: Thank you.

CNN's Omar Jimenez is in Chicago where the heat index could hit 110 also there. So what are the options for people to deal with it?

OMAR JIMENEZ, CNN CORRESPONDENT: Yes, Victor. As you mentioned, this type of heat isn't just hot, it's dangerous, and people here in the city know that it's why we are outside one of six cooling zones that community service centers that the city is offering, but also they're pointing people toward public library locations, other safety centers, even some of those splash pads here in the city trying to find some form of relief from this heat.

It's hard to imagine that a day and a half ago, we too were dealing with tornado warnings and rain and then now here we are dealing with heat index values up to around 105 degrees Fahrenheit. But it's not just here in places across the Midwest, while we are out of school in Chicago and Detroit public schools so decided to close early through the rest of the week to deal with this extreme heat.

In Minneapolis, more than a dozen schools without air conditioning have moved to e-learning to try and deal with this extreme heat. Take a listen to one doctor who lays out just how dangerous this heat can be.

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DR. SARA FRIEDMAN, EMERGENCY PHYSICIAN, ABBOTT NORTHWESTERN HOSPITAL: When you are not making sweat anymore, that means you are moving to a new phase because your body isn't responding the way it's supposed to respond. It can take days. It can take months. You can get kidney disease. You can get heart disease. It's not a little deal to get sick from the heat.

(END VIDEO CLIP)

JIMENEZ: And, of course, Chicago knows how deadly this can get after one particular heatwave in the '90s, hundreds of people died as a result of that heat and something no doubt on the minds of many public officials as they work to try and make sure nothing at that scale or even close to it ever happens again.

BLACKWELL: Omar Jimenez for us in Chicago. Thank you, Omar.

We're learning about some divisions within the House Select Committee members over whether or not to criminally refer former President Trump to the DOJ. We're live on Capitol Hill, next.

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BLACKWELL: The January 6 Committee today released new evidence that challenges the Capitol Police findings about alleged role of a Republican Congressman Barry Loudermilk. The Committee says a man who made threats against lawmakers while marching toward the Capitol on January 6th was also on Loudermilk's tour of the Capitol complex on January 5th. CNN's Ryan Nobles is on Capitol Hill. Walk us through it.

RYAN NOBLES, CNN CONGRESSIONAL CORRESPONDENT: Yes, that's right, Victor. The Committee wants to talk to Loudermilk about this tour and get any information that they can about this individual that is seen on surveillance video taking pictures of things like staircases and entrances, security stanchions all related to the Capitol complex by the House office buildings as it enters into the Capitol.

And they're most interested because this same individual took video outside of the Capitol on January 6th where he made very specific threats against members of Congress. And they're trying to figure out just exactly what Congressman Loudermilk knew about this individual and his participation in this tour.

Now, Congressman Loudermilk has said from the very beginning that there was nothing nefarious about this tour that it was innocent, it was just a group of his constituents that were in Washington and wanted to see what they could at the Capitol. He actually just spoke about this a few minutes ago. This is what he had to say.

(BEGIN VIDEO CLIP) REP. BARRY LOUDERMILK (R-GA): These are folks who had never been to

Washington, D.C. and they were here to visit their congressman and they're excited.

UNIDENTIFIED FEMALE: So why not just speak to the Committee and just ...

LOUDERMILK: Because the Committee's never called me and asked me anything.

(END VIDEO CLIP)

NOBLES: So Loudermilk continues to say that the committee is not engaged with him on this topic, that they're just trying to make him look bad. But the Committee does have a lot of real questions about this and is part of their investigation, particularly because there have been members of the House Democratic Caucus, who in the days after January 6 were very concerned about these tours, some even calling them reconnaissance tours.

So at this point, Loudermilk, doesn't appear to be willing to engage with the committee. And again, Victor, he says that he's done nothing wrong.

BLACKWELL: All right. Let's talk now about the division within the January 6 Committee about criminal referrals. You've got some new reporting.

NOBLES: Yes, that's right, Victor. And this really came out and was - it came out in a very public way earlier this week, when the Chairman of the Committee, Bennie Thompson told a group of us that he didn't think it was necessary for the committee to offer up a formal criminal referral of Donald Trump or anyone else in his orbit, despite the fact that even if the Committee believes that he had committed a crime that the Justice Department would have access to this information, whether or not the Committee took that step. That led to a quick rebuke from members of the Committee, including the Vice Chair Liz Cheney.

And what we've learned through our reporting is that most of the members of the Committee really do believe that the former President committed a crime and what they're wrestling with right now is what to do with that information: Do they make a formal referral to the Department of Justice? Do they just issue a report at the end of all of this where they lay out in specificity all of their findings and then hope that the Department of Justice acts on it? It is a very difficult situation. This is really unprecedented in many ways.

[15:30:01]

There's an argument to be made that not making that referral takes the politics out of it and it allows Merrick Garland to do his job without that pressure.