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Trump Calls Unsealed Affidavit "Total Public Relations Subterfuge by FBI & DOJ"; Trump & Lawyers Huddled This Week Ahead of Today's Key Deadline; Biden: "We Will Let the Justice Department Determine" if National Security Was Compromised at Mar-a-Lago; Fed Chief: "Some Pain" Ahead for Households & Businesses; Today: Fed's Favored Inflation Gauge Shows Signs of Easing; Zaporizhzhia Nuclear Plant Reconnected to Ukraine's Power Grid; Putin Signs Decree Boosting Military by 137,000 Personnel. Aired 1:30-2p ET

Aired August 26, 2022 - 13:30   ET

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

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[13:33:03]

BIANNA GOLODRYGA, CNN HOST: Former President Trump is now trying to discredit today's release of a redacted version of the affidavit that led to the FBI search of his home.

Meantime, some of his allies tell CNN that today's new information is bad news for him.

CNN's Gabby Orr has the details.

Gabby, what is Trump saying now?

GABBY ORR, CNN REPORTER: Well, the former president just moments ago took to Truth Social, his own social media platform, to complain about this affidavit, calling it heavily redacted and repeating arguments that he has made previously about the way that this FBI search at Mar- a-Lago was conducted.

He calls this a break-in of my home. He goes after the judge, Bruce Reinhart, who arrived the search warrant in the first place. And he also criticizes both the FBI and the DOJ.

This is a similar tactic that he has used since we first learned that the FBI conducted a search at Mar-a-Lago.

Repeatedly trying to discredit the basis of this search, claiming that he declassified presidential records that were taken from the White House to his Mar-a-Lago property at the end of his presidency, and that there was no reason for the search to occur.

He says, at one point in this post, quote, "We gave them much."

So the president -- former president again trying to portray himself as entirely cooperative with both National Archives officials and federal investigators -- Bianna?

GOLODRYGA: Yes, we've heard this explanation many times in the past.

So what do we know now about Trump's discussions with his legal team and his allies? And is the current legal team up to the task?

ORR: Well, we know that the former president huddled with his attorneys and members of his legal team at his Bedminster, New Jersey, golf club earlier this week, presumably, to prep for the unsealing of the redacted version of the affidavit.

We don't know exactly what was discussed during that, but our reporting tells us that the former president has been asking allies of his whether they think he is truly in legal jeopardy, whether he will be indicted.

[13:35:07]

And we know that there are concerns inside his -- inside his orbit, inside his inner circle about the legal team that currently surrounds him.

We've become familiar with names like Christina Bobb, a former "One America News" host, who is now working as an attorney for the former president.

Alina Habba, a former parking garage attorney from New Jersey, who is representing the former president.

And, of course, Evan Corcoran, who signed a letter to Jay Bratt that was at the end of this unsealed affidavit today.

Now, Jim Trusty, who is a former federal prosecutor and U.S. attorney, is seen widely as the most competent member of the former president's legal team.

But right now, there are definitely concerns inside his orbit that he does not have adequate representation and that his current team of attorneys are just not up to the task of defending him in a moment like this.

GOLODRYGA: Yes. He also has that deadline today to refile his initial motion.

Gabby Orr, thank you.

Let's go to the White House now where Phil Mattingly is.

So, Phil, is President Biden or anyone on his team saying anything about what we've just learned in the past hour or so?

PHIL MATTINGLY, CNN WHITE HOUSE CORRESPONDENT: You know, Bianna, in short, no. And it's very on brand for the White House to visit on everything in their power through the presidency.

But certainly as it relates to this investigation, not to weigh in, not to have any particular insight on any moment as this has all transpired. The White House briefing started about 20 minutes ago and the top

official to speak at that briefing, deputy economic advisor, only talking about student loans.

We'll see if Karine Jean-Pierre gets a question and weighs in any differently than she has prior to now. But officials that I'm talking to say don't consider that very likely at this point.

This has just been the approach the White House has had, almost operating in a parallel universe to anything related to the former president, particularly as it relates to any investigations.

Keep in mind how the May 11th letter from the National Archivist was revealed, making clear that, even when it came to privileged questions as they were trying to give investigators access to some of the boxes that they had at the National Archives.

The president delegated the privilege decision to the National Archivist to try to keep as much distance as they can both for concerns about political repercussions, making sure they want the Justice Department to be seen as independent, but also because the president has an agenda that he wants to focus on.

Now, he was, in talking about an element of that agenda, the Supreme Court decision on Roe v. Wade, asked whether he had concerns about the national security implications of what may be discovered in the former president's -- what he has in terms of documentation in terms of national security documents.

This is how he responded.

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UNIDENTIFIED REPORTER: Are you concerned --

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JOE BIDEN, PRESIDENT OF THE UNITED STATES: We'll let the Justice Department determine that. We'll see what happens.

(CROSSTALK)

(END VIDEO CLIP)

MATTINGLY: "We will let the Justice Department determine that."

You can basically take that answer, maybe add or subtract two or three words and that's about the extent of every answer you're going to get from every official, from the president, on down.

And we'll note that the president will be leaving the White House shortly. Supposed to tape an interview with Jay Leno for some future content.

That is not the focus of the White House today. The focus is student loans and eventually the president will head back up to Delaware -- Bianna?

GOLODRYGA: Phil Mattingly, you'll stay on top of this for us as always. Thank you.

[13:38:27]

Well, more rate hikes ahead? Fed Chief Jerome Powell is hinting yes in the fight against inflation.

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[13:43:23]

GOLODRYGA: Jerome Powell speaks, the investment world listens. New today, the Federal Reserve chairman weighing in on the economy.

Here's the warning that caught Wall Street's attention.

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JEROME POWELL, CHAIRMAN, FEDERAL RESERVE: While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses.

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GOLODRYGA: I want to bring in Greg Ip, chief economics commentator for "The Wall Street Journal," and CNN business correspondent, Rahel Solomon.

Greg, let me start with you.

What do you make Powell's comments today? And how should households and businesses read that warning of the potential pain to come?

GREG IP, CHIEF ECONOMICS COMMENTATOR, "THE WALL STREET JOURNAL" You know, this was one of the toughest speeches I think I've ever heard a Fed chair deliver. It was tough for the markets and tough for Americans.

The first think, with respect to markets, he basically told them, you're being way too optimistic, we are not going to cut rates next year like you've been assuming. And that's why the Dow is down 600 points as we speak.

The message to Americans was, as you heard from that clip, is that getting inflation down will involve a weaker economy, probably higher unemployment.

Again, as close as you'll ever hear a Fed chairman say get ready for a recession. Not a happy message.

The point he wants to drive home is, if they dawdle and allow inflation to become entrenched at high levels, the pain will ultimately be even worse. GOLODRYGA: So not a happy message. Get ready for a recession.

Rahel, this comes the same day that we got economic data showing consumers are continuing to spend not at the rate they spent last year, right? But unemployment is at historic lows.

What is he seeing that we aren't, given that this data is really rear view.

[13:45:00]

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Yes. It's what he's seeing that is just right behind the corner, right? I mean, consumer spending has held up but it is slowing. Business investment is slowing.

Inflation has just started to ease, but not nearly enough for the Fed to feel confident that inflation is significantly moving in the right direction.

To your point, we did get new inflation data today that showed that inflation is easing up. Monthly inflation actually declined 0.1 of a percent. Core inflation rose 0.1 of a percent.

So we are dealing with the very early stages of what could perhaps be the peak of inflation. And so we're just not there yet.

So the pain that he's talking about is, for certain people, we're going to be dealing with high inflation and high borrowing costs. That's going to hurt on both sides.

But also, as Greg pointed out, the likelihood that the demand for workers is likely going to change. You're probably not going to have as many options as we have had these last few years. And we could see some job loss.

GOLODRYGA: So that 3.5 percent may not stay where it is right now.

SOLOMON: It may not.

GOLODRYGA: Greg, it's clear the Fed chair does not want to understate the current economic environment. Of course, it was last year, he mistakenly, he admitted himself, calling inflation transitory.

That having been said, we all understand this is a very unusual economy right now. I guess the question is, does he have the right tools at his disposal to deal with it?

IP: Well, he made the point that not all this inflation is a result of excess demand, and excess demand is the only thing the Fed can deal with by raising interest rates.

As we've all heard many times, there have been all sorts of supply chain bottlenecks, container ships that are tied up offshore, shortages of semiconductors and so on.

But Powell confronted that argument head on. He said just because some things are causing inflation that aren't caused by demand does not absolve us, the Fed, of getting inflation down.

Look at the labor market, for example. We are used to saying, well, 3.5 percent unemployment, that's great. Half a million jobs created per month, that's great.

No, the Fed is saying that's not great. The demand for laborers is far in excess of the supply. They have to act until the demand and supply come back into line with each other.

GOLODRYGA: Yes, that inconsistency is puzzling.

Rahel, the Fed is meeting again next month. What can we expect to see from them in terms of rate hikes?

SOLOMON: The expectation, certainly after today's meeting, is that we're going to see another three-quarters of a percent.

To put this in perspective, right now, the Fed's benchmark interest rate is about 2.5 percent. The consensus is we are heading toward 3.5 percent, approaching 4 percent toward the end of the year. I.e., we're still not done yet, right?

In terms of what the Fed is going to be looking for, Powell has been very clear that they are looking for clear and convincing evidence that monthly inflation is declining. We haven't seen that yet.

So they're going to be watching very closely every inflation report that comes in, like this morning's, every job report that comes in, to get a sense of, are we starting to see some weakening in the labor market?

Are we starting to see clear and convincing signs that inflation is easing? And we haven't yet.

GOLODRYGA: Yes, that was really an ominous warning from him today, that bringing inflation down may be a bit more painful for households and companies.

Rahel Solomon, Greg Ip, thank you so much. Have a great weekend.

Well, a terrifying and fragile situation in Ukraine right now. Europe's largest nuclear power plant under constant threat of losing its power supply. We'll have the latest from the ground, up next.

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[13:52:48]

GOLODRYGA: In Ukraine, the threat of a Radiation disaster still hangs over Europe's largest nuclear plant despite the most immediate danger being tampered down for now.

Ukrainian officials say the Zaporizhzhia facility has been successfully reconnected to the nation's electric grid after shelling and fires knocked it off for hours Thursday.

CNN's David McKenzie is live in Lviv.

So, David, there's a lot of uncertainty about the state of that plant, and that in and of itself is worrisome.

DAVID MCKENZIE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Bianna, it's very worrying. And that power outage, it's not just an issue for electricity in the area. It's a very dangerous scenario that could lead, worst-case scenario, to a meltdown or an overheating of those fuel rods.

Just a short time ago, the Foreign Ministry of Russia saying that they will do everything they can to allow IAEA inspectors, that's atomic energy inspectors, in there safely.

But you have not really seen any concrete moves by the Russians to demilitarize that zone to make it possible to get inspectors in, across the frontline, over the Dnipro River, into that area to check that it's safe -- Brianna?

GOLODRYGA: Yes, those inspectors want to get there as soon as possible.

Meantime, Vladimir Putin just signed a decree raising the number of Russian troops by 137,000. That's being interpreted by many that this war is really far from over.

I'm just curious, how is this being received in Ukraine?

MCKENZIE: Well, I don't think it will halt any of the resolve of the Ukrainian military to keep fighting, of course, and to stand up against the Russian military might.

You'll remember, at the beginning of this conflict, many experts felt the sheer weight of Russian forces would overwhelm Ukraine quickly. That hasn't happened.

Now this latest decree from the Kremlin will come into effect January 1st next year. It raises the strength of the military to more than two million people.

But that strength and that massive oversupply, if you will, of mechanized units and heavy fire power has not meant that Russia has been able to, in fact, push that front line very much in weeks, even months, Bianna.

And the question now is, are we going to see this much-anticipated counter offensive from the Ukrainians that they've been telegraphing for some time -- Bianna?

[13:55:02]

GOLODRYGA: Russia's unprovoked war now in its sixth month.

David McKenzie, thank you.

Well, that does it for me. Thank you so much for spending your week with me. Ana Cabrera will be back here on Monday.

Until then, don't go anywhere. A busy Friday afternoon. The news continues right after this.

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