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Federal Reserve Announces Decision On Interest Rates; Trump Election Lawyers: Justice Thomas Was "Key" To Plan To Delay Certification Of 2020 Election; Court Docs: Suspect In Paul Pelosi Attack Woke Him By Standing Over His Bed, Prevented Escape. Aired 2- 2:30p ET

Aired November 02, 2022 - 14:00   ET

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

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BIANNA GOLODRYGA, CNN ANCHOR: Hello everyone, I'm Bianna Golodryga. Welcome to CNN NEWSROOM. Victor is off today.

Well, the Federal Reserve is expected to announce their decision on interest rates at any moment. Now, most economists are expecting another major rate hike of 75 basis points, all of this, of course in the Fed's efforts to control the country's historic inflation. The decision will likely produce major ripple effects on your personal finances and the economy in the months to come.

CNN's Matt Egan joins us now. Matt, I know we've been awaiting this decision. What is the Fed said?

MATT EGAN, CNN REPORTER: 75 basis points, the Fed just delivered another massive interest rate hike designed to put this inflation fire out. That brings interest rates up to the highest level since early 2008. That means higher borrowing costs for all of us.

Now, this is the fourth straight interest rate hike of three-quarters of a percentage point. This is historic. I mean, we've never seen drastic actions like this under Janet Yellen. We never saw this under Ben Bernanke or even Alan Greenspan.

He actually had to go back to the early 1980s under Paul Volcker. And I think this says a lot about not just how high inflation is, but how stubborn it is. I mean, it's been basically stuck at these four-decade highs.

Now the Fed's statement, which is watched very closely, is basically identical to last month except for one key part. The Fed reiterated that ongoing interest rate hikes are likely to be appropriate. But they added that this is going to be the case in order to get policy restrictive enough to get inflation down to 2 percent over time. And the Fed also laid out some criteria about what it's going to take for them to slow the pace of these massive interest rate hikes.

They laid out three key factors, one, economic and financial developments, two, the cumulative tightening of monetary policy thus far. And this is key, the lags with which monetary policy affects economic activity and inflation. And that's important because it takes many months for these rate hikes to actually hit the real economy.

And so, there are some fears that the Fed might be overdoing these rate hikes without even knowing it. Maybe, Bianna, the Fed is laying the groundwork here to possibly slow down the pace of rate hikes in the coming months.

GOLODRYGA: Yes. Another rate hike as expected by the Federal Reserve. Matt Egan, thank you. We should note that the White House in anticipation of this announcement released a statement saying that the Fed is independent and the president believes that the Federal Reserve does have the best monetary policy.

Joining us now is CNN Economics and Political commentator Catherine Rampell. And the University of Michigan economics professor, Justin Wolfers. We'll get to Justin's reaction in just a second. But, Catherine, this was really baked into the cake. We all anticipated a 75 basis point interest rate rise here. But I guess the question is when does the Fed stop and how fast are they willing to go to get to that stopping point?

CATHERINE RAMPELL, CNN ECONOMICS AND POLITICAL COMMENTATOR: That is the big question here. As you point out, everyone was basically expecting a 75-basis point hike today. The question is what happens in December at their next meeting? What happens next year?

There are signs that the economy is slowing, and that there are some growing weaknesses in the U.S. economy, certainly in the global economy at this point. And the Fed operates on a lag. You know, they raise interest rates today. You may not see the effect of that for money -- for many months down the line.

So the question is, when do they start slowing? And we'll presumably hear the chairman talk a little bit about that or he'll get asked about it soon. And how do they convince markets that slowing does not mean, you know, maybe 50 point basis hike -- 50 basis point hike, for example, does not necessarily mean that they have taken their eye off the ball on inflation.

GOLODRYGA: Yes. And, Justin, you are hearing both from Democrats and some senators suggesting that the Federal Reserve should take a pause now and like their previous rate hikes really ripple into the economy, but economists are suggesting the same, including some members of the Federal Reserve's own board and number two, Lael Brainard said that it may be time to take a pause that there had been a lot of rate hikes as of late. Their chairman and other board governors have suggested the same that it's important not to overcorrect. What are your views here?

JUSTIN WOLFERS, PROFESSOR OF ECONOMICS, UNIVERSITY OF MICHIGAN: I think it's important to put all of this into a broader historical context, which is while the Fed raised rates today to 4 percent, by jingo, that's not really high rates if you've asked your parents or you ask your grandparents. A lot of the work the Fed has been doing is actually been undoing the extraordinary work we did to try to put the economy back on its feet after the pandemic. So it's a big shift back to normal.

We're probably as of today, right around normal. And right now, the question the Fed faces over the next few minutes is how much does it actually want to tighten to move rates a little beyond normal and actually work harder to really slow things down?

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GOLODRYGA: Catherine, you know, we focus so much on the big headline figure which remains stubbornly high. But we are seeing some impacts from their rate hikes play out into the economy, whether it's the housing market, car prices are starting to go down, supply chain issues are starting to open up as well and ease. When do consumers start to see that impact on what they're paying at gas stations and at the grocery store?

RAMPELL: Not soon enough, I think is, unfortunately, the answer. So for housing prices, for example, you have seen mortgage rates go up a lot. They -- I think have doubled this year, or more or less. However, house prices, which you would think would fall in response, have not come down all that much. And you know, a lot of people are forecasting that they might come down more in the year ahead. But we don't know yet.

So, so far, again, the Fed's medicine works with a lag, we've seen some indications that it's affecting prices around the edges. But core inflation, which is the term for when you strip out volatile food and energy prices, still remains uncomfortably high, which is why I think you're going to continue to see the Fed raising rates for quite a while.

GOLODRYGA: Yes. And, Matt, I want to get back to you. We know the Federal Reserve's job is not to pay attention to the stock market, but you pay attention to it and investors do as well. We've seen the market bounce up after this announcement, up about 200 points. What does that suggest to you in terms of how Wall Street is reacting?

EGAN: Well, Bianna, I think there are these hopes from investors that Chairman Jerome Powell is going to drop some hints in the next few minutes about possibly slowing down the pace of interest rate hikes. That is what drove markets up last month.

We saw this historic gain for the Dow. And I also think that that's what some politicians, including Senator Elizabeth Warren, are hoping for because she's worried the Fed is going to go too far and cause a recession. But I don't know if we're going to definitely hear that from Powell.

We've also heard from some famous economists, Larry Summers, for example. He thinks it would be a mistake for the Fed to pause here because inflation is still too high. And there have been some new numbers out just this week that really support the idea that maybe more work is needed from the Fed.

We learned that private sector payrolls last month unexpectedly accelerated, job openings in September went up, good news, of course, for job seekers, but that's actually the opposite of what the Fed wants to see.

So, you know, this is a very tricky spot, very -- almost an impossible situation facing the Fed here. Because if they don't do enough, then you can see inflation stay high or even go higher. And if they end up doing too much, they could end up causing a recession.

GOLODRYGA: Yes. And, Justin, we saw a case study and how outside factors which the Fed has no control over really impact the economy as well. Everyone does focus on the term transitory in terms of inflation last year, but of course, that suggested that we hadn't really factored in supply chain issues, the pandemic, obviously, the war in Ukraine, there's a potentially a looming rail strike here in the United States. I mean, how much does this factor into what Jay Powell is considering as they are meeting and talking about raising rates?

WOLFER: A lot of these pressures are things that are one-off and they are, in some sense, transitory, or though I think we've learned the word transitory means twice as long as we wish it would be. And so there are some unusual factors raising inflation.

Look, I think the big thing for the Fed is you stare -- you drive a car, not by looking at the back window, and the back window shows us we've had a lot of high inflation, but by looking forward. And when we look forward, the Fed's own forecasters are seeing inflation coming down fairly dramatically over the next year or so.

Not to rates that they're comfortable with, but the sorts of rates where all of us, hopefully at a year's time will stop talking about inflation so much. And that I think is part of the case for we've raised rates a bit. Let's see how far inflation is going to fall over the next year as factors like Ukraine, like the pandemic, like supply chain disruptions, start to become less of an influence.

GOLODRYGA: All right, Justin Wolfers, Matt Egan, Catherine Rampell, thank you so much for your analysis. We appreciate it.

Well, minutes from now, President Biden will deliver remarks on his administration's plan to expand the workforce and create a pipeline of employees for specialized fields. CNN's senior White House correspondent Phil Mattingly joins us now. So, Phil, explain what that even means and how it could impact the economy.

PHIL MATTINGLY, CNN Yes, Bianna, it's particularly interesting coming on a day like today. You know, that conversation you just had with Catherine, Matt. And Justin is such a great window into the complexity of this moment inside the White House for President Biden and his economic team, as they try and figure out some way to address what is by far the most politically salient issue in poll after poll after poll just six days before the midterm elections. And when you look at what the administration's economic agenda has been, including three cornerstone pieces of legislation.

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At the core of those are many long-term structural changes that they're putting into place that would address some of the key drivers of inflation in this moment. Long-term, however, is kind of the keyword there. And when it comes to the workforce development issues that the president is going to be speaking about shortly, that's critical.

Labor supply has obviously been a big issue over the course of the last several months. This will go a long way towards addressing the labor supply and diversifying that labor supply as well in critical jobs.

But it also kind of makes a key point here. This isn't something that happens overnight. The administration has been working intensively on it over the course of the last several months, something the president will highlight. Both the public and private sector work that has gone into this, but it's something that will take time. Time that isn't necessarily going to have any effect six days from now, but over the long term administration, officials believe it will.

GOLODRYGA: So, the message really is trust us because clearly nothing can change over the course of just six days.

MATTINGLY: Yes.

GOLODRYGA: Also tonight, the president is set to deliver another major address, and this one's focusing on protecting and preserving our democracy. What more are we learning about this primetime speech?

MATTINGLY: You know, one thing advisors have made clear is this is something that the president cares deeply about. And you just have to listen to him. He brings these types of issues up quite regularly, if not publicly in remarks in front of reporters, when he's talking at fundraisers, we see transcripts of those conversations.

And this is often a central component, kind of this critical moment for democracy. All of the various threads that he feels like are a very real threat to democracy right now.

Two real driving components, according to advisors behind the president's decision to do this tonight, were dozens of Republican officials that are currently running for election, not being willing to say they will accept the election results. I think that's a very big concern inside the White House. And the other has been the attack on Speaker Nancy Pelosi's husband, Paul Pelosi.

Basically, the president is close to the speaker, knows her husband quite well, deeply affected by kind of everybody's greatest fear that this current environment would lead to violence at some point. Both of those will be elements of what the president's going to say tonight. This is as much about the president, his belief, and his overarching concern as it is an electoral political issue, and that's why he's speaking about it.

GOLODRYGA: Yes. Phil Mattingly, thank you.

Joining me now is CNN's chief political correspondent, Dana Bash. Dana, always great to see you.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Great to see you.

GOLODRYGA: So this afternoon, the president is getting focused once again, on the economy. We heard the Federal Reserve just raise rates yet again. Another poll -- a CNN poll showing that 75 percent of Americans believe that we are currently in a recession. Now, this really stands out because we are not currently in a recession by any economic measure, but this gives us a sense of how big the problem of perception really is with Democrats, right?

BASH: That's exactly right, with Democrats, with Republicans, with pretty much anybody in this country. Because when you think of the -- of the term recession, you know, you are an economic expert, that there are technical reasons why economists, government officials will say we are -- we are not in a recession.

Then there is the reality of how people are feeling. And they feel that they are in a personal recession in the everyday things that they have to do when they go to the grocery store, when they buy fundamentals like eggs, like milk, when they go to the gas pump, and then everything in between, it's just so much more expensive.

And you know it's interesting because for most of my career covering politics, so much of the focus has been on the job numbers, do people have jobs, and that kind of helped dictate and determine the way people feel when they go to the polls. It's not that way now.

GOLODRYGA: Yes.

BASH: Maybe, you know, if you and I were covering politics during the Carter administration, it would feel -- it would have felt different or even the Reagan administration and since then. But this is really kind of epic.

And it's -- what's reflected in this poll is reflected in the conversations that I have had in traveling to -- I believe it was five different states since Labor Day talking to voters. Democrats, Republicans, independents, they're feeling the economic pain, and they want to hear solutions from their leaders.

And that in some respects and other respects, they just want to take out their anger on somebody and the best way to do that is with the greatest thing that we have as Americans, which is our vote.

GOLODRYGA: Yes, you're so right about how unusual this economy is because unemployment remains at a historically low rate, wages have gone up over the past year --

BASH: Yes.

GOLODRYGA: The administration has been touting that but clearly Americans don't feel that. I want to delve further into this new polling because it's also showing that half of the country doesn't believe in their election integrity, that their -- that their votes are justified and that they represent the will of the people.

And, Dana, this is notable because 2020 according to all election experts, that was the safest, most secure election in U.S. history. So what does that say about what were in store for next week and in 2024?

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BASH: It's alarming. I mean there's no other way to see those numbers is alarming. And that is clearly as Phil was reporting why President Biden is going to give a speech on this issue tonight, just six days before Election Day. And this is what happens when leaders, when media, we're in such a fracture media environment, continued to bang away at a message whether it is true or not. In this case, it is just not true, as you said.

The 2020 election was not stolen. There was no widespread fraud. We have heard it from so many experts and officials who were in charge then, from the federal level, from Donald Trump's Attorney General Bill Barr to White House Counsels who worked with him to the state level, people who looked at the -- at the votes in very crucial battleground states, these are Republicans who did it. And so you have those facts but then you have the, frankly -- I mean, it's propaganda that goes out there.

GOLODRYGA: Yes.

BASH: And it's very hard to battle against that.

GOLODRYGA: I guess the big question is, you know, is he the right messenger? I know he's the President of the United States, but according to our new polling, his approval rating has dropped to 41 percent.

BASH: Yes.

GOLODRYGA: We're not going to hear this message from his predecessor.

BASH: Yes.

GOLODRYGA: So who is that person that can tell Americans, you know, the truth about the elections being fair?

BASH: They --

GOLODRYGA: Dana Bash --

BASH: -- They don't know. And at this point, a large part of what you're seeing is to make sure that the Democrats who are not planning to go vote actually get out and vote. That's what these speeches are about, enthusiasm.

GOLODRYGA: Enthusiasm among Democrats is low too. Dana Bash, thank you.

BASH: Thanks, Bianna.

GOLODRYGA: Well, a newly obtained e-mail shows that a lawyer for former President Trump describes Supreme Court Justice Clarence Thomas as a key to Trump's plan to delaying certification of the 2020 election. And House Speaker Nancy Pelosi and her family will soon see the bodycam footage from the night of that brazen attack on her husband, Paul. Court documents reveal the suspect had a laundry list of prominent politicians that he was targeting. We'll have the stunning details for you, up next.

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GOLODRYGA: Election lawyers for then-President Donald Trump say Justice Clarence Thomas was a key component in Trump's plans to try to delay certification of the 2020 election. E-mails turned over to the House's January 6 Committee detailed the extent that Trump hoped to leverage the power of the High Court. CNN's Paul Reid joins me now. So, Paula, what exactly did Trump want Justice Thomas to do here?

PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: Well, Bianna, they wanted Justice Thomas to block the counting of electoral votes. In these e-mails, you see former President Trump's attorneys discussing how to frame a legal argument that they hoped would reach the Supreme Court.

And then they hope that Justice Thomas would either issue a stay, or even an opinion saying that the state of Georgia was legitimately in doubt. Now, an important piece of context here is that Justice Thomas is responsible for emergency matters coming out of the state of Georgia and the surrounding region, which is why he would have been the one to receive this matter. And that appears to be part of their strategy here.

But it's notable this mention of Justice Thomas in these e-mails because of course, his wife, Ginni Thomas attended the Stop the Steal rally on January 6, and this congressional investigation has uncovered text messages that she sent to then-White House Chief of Staff Mark Meadows pushing these election fraud claims.

And, Bianna, the reason we get to see these e-mails that would otherwise potentially be protected by the attorney-client privilege is the fact that a federal judge has said that they likely contain evidence of a possible crime or crimes by Eastman and former President Trump, as it appears that they were not filing these legal challenges in good faith, but it appears they were doing so to obstruct congressional proceedings.

GOLODRYGA: Paula, also notable here is that appears there were concerns that Trump may have come dangerously close to making false statements in court documents. Talk about the significance of that.

REID: That's exactly right. Because these e-mails, they also reveal how these attorneys were worried that the former president could be prosecuted for verifying false election claims to the court. On December 31, his former Attorney John Eastman says that he is worried that as they were filing this federal court challenge, the president had previously verified information that he had since learned was false and that if he was going to do that, again, he believed that "an aggressive DA or U.S. attorney could go after both the former president and his attorneys." And, Bianna, as we've seen, prosecutors are going after both.

GOLODRYGA: Yes. Paula Reid, thank you.

Well, there are new details about the brutal attack on Nancy Pelosi's husband. A new court document says the suspect allegedly woke Paul Pelosi by standing over his bedside preventing him from escaping and demanded to know the whereabouts of the House Speaker. David DePape has pleaded not guilty to attempted murder and other charges. A source tells CNN that as early as today, members of the Pelosi family could hear audio from the 911 call Paul Pelosi placed and view body camera footage from the responding officers.

CNN's Veronica Miracle joins me now from San Francisco. So, Veronica, what more are we learning about DePape's alleged intentions here?

VERONICA MIRACLE, CNN CORRESPONDENT: Well, Bianna, the San Francisco police chief says he has reviewed that body camera video himself. And he says after seeing it, he believes that David DePape had intentions to kill Paul Pelosi. He also says that you can see him strike Paul Pelosi with the hammer at least once. He's also talked to CNN about that 911 call which he says is about three minutes long.

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And Paul Pelosi suddenly tells the dispatcher that he is in danger and that dispatcher then able to send help. The police chief crediting that dispatcher with saving Paul Pelosi's life. Now, Bianna, according to these court documents, DePape was there to find Nancy Pelosi. And he told officers and medics on the scene that he didn't have intentions to hurt Paul Pelosi, but that he "was there as a suicide mission." And he said I'm not going to stand here and do nothing, even if it cost me my life.

The San Francisco district attorney says this was absolutely politically motivated. In fact, she says that he told officers that there were other targets, including a local professor, as well as other federal officials, and also other politicians, including their family members. Here's what the district attorney had to say.

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BROOKE JENKINS, SAN FRANCISCO DISTRICT ATTORNEY: There were other public officials that were apparently targets of his, and obviously he showed up at the speaker's house first. I think we've seen just like on January 6 that this insightful commentary that goes on what has become I think, accepting the behavior of people, encouraging violence, encouraging people to take these extreme standpoints and viewpoints is certainly laying a pathway to this type of conduct.

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MIRACLE: I was in court yesterday when David DePape was arraigned on numerous felony charges. He entered not guilty pleas for all of those charges. The Pelosi family was not in court, but they did tell the judge through the prosecutor that they are asking for privacy during this very traumatic time. Now, when David DePape entered the courtroom, he had his arm in a sling and the public defender later told us that it was because he had dislocated his shoulder during his arrest. I asked that public defender if he could comment on DePape's mental state, and he said he could not, Bianna.

GOLODRYGA: All right, Veronica Miracle, we're learning new details every day. Thank you so much.

Well, up next.

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GOLODRYGA: Air raid alarms blare in South Korea after North Korea launches more than two dozen missiles. How the U.S. is now responding to the heightened tensions? And they were once close allies but this weekend, Governor Ron DeSantis and former President Trump will hold dueling rallies in Florida. What this signals for the GOP's road to 2024?

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