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Migrant Surge; Congress Works to Avoid Shutdown; Federal Reserve to Announce Next Rate Hike Decision. Aired 1-1:30p ET

Aired December 14, 2022 - 13:00   ET

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

[13:00:12]

ANA CABRERA, CNN HOST: Hello. I'm Ana Cabrera in New York. Thank you for being here.

All eyes on the Fed and its fight against inflation. Minutes from now, we will hear from Fed Chair Jerome Powell on the last rate hike decision of the year. Wall Street, Main Street, even the Oval Office are on edge. The hope? That Powell pumps the brakes with a smaller rate increase. The fear? That the Fed goes too far and raises the risk of a recession.

CNN's Matt Egan is at the Federal Reserve, and economist Diane Swonk is joining us as well.

Matt, we have seen four massive rate hikes in a row. Today is expected to be smaller. Why is that? Did yesterday's numbers factor into this decision?

MATT EGAN, CNN REPORTER: Well, Ana, if the Fed does go with a smaller rate hike today, it will be a sign that officials believe that their tough medicine is starting to work.

Yesterday's inflation report showed that consumer prices went up in November at the smallest annual rate since late last year. Inflation is still very high at 7 percent. That's more than triple the Fed's target, but it is starting to go in the right direction. So that is why Wall Street is betting the Fed will raise interest rates by 50 basis points today.

That would be a significant shift after four straight meetings where they raised interest rates by 75 basis points. To give you some context about where we are, a 50-basis-point rate hike would still lift interest rates to the highest level since 2007.

And so that does mean borrowing costs are still going up for everyone. Mortgage rates are near 20-year highs, credit card rates are at record highs. And this would also mean more pressure on the economy. The Fed is essentially still pumping medicine into this economy to try to treat inflation. They're just maybe going to lower the dosage a bit.

Two big things to watch for today. One, Fed officials will update their targets for where they think interest rates are going next year. So Wall Street wants to see how many more rate hikes the Fed thinks that are needed for next year. The other big question is whether Fed Chair Jerome Powell, he drops any hints about when the Fed can pause on these interest rate hikes next year.

Because, Ana, the concern remains the same. Can the Fed stop raising interest rates before they accidentally cause a recession?

CABRERA: Yes, it's that fine line or a delicate dance, whichever metaphor you want to use.

Diane, just to reiterate here, we have seen four straight supersize interest rate hikes, and now we have five straight months of inflation cooling.

At what point can the Fed say, OK, enough is enough?

DIANE SWONK, CHIEF ECONOMIST, KPMG: Well, that's -- unfortunately, they don't know the exact number. And they won't know until after the fact.

And that's what ups the risks that they go too far. They're really cognizant that they have been humbled more than once by inflation re- accelerating or accelerating much longer than they thought. They don't want to allow the underlying inflation out there to metastasize, much like, as we talked about the medicine, it's like a cancer.

Inflation is like cancer. And if you don't catch it early, and really eradicate the economy of it, it can metastasize and become something much more corrosive. And that's what the Fed is trying to avoid. That's a fine line, as we said, trying to meet that line between, how high do they go?

They will probably say they're going to go to probably a quarter- percent rates this time, but I think it's important to remember that's -- they have been chasing up their terminal rate for some time. What will be really interesting is to start to see the divide within the Fed on how quickly they think they can cut rates later on, and also how long they feel they have to keep rates higher.

And there will be some who exceed that level as well. And you're going to start to see much more dispersion. We have got a very diverse Federal Reserve Board. And for the first time since 2013, we're fully staffed and every president -- and on the board, and that diversity is going to be more debate as we get this nuance of, where do we actually stop?

How far do we go? We don't want to risk skating on thin -- we could be skating on thin ice as we move into 2023. How much do we want to chill the economy and risk coping through that ice?

CABRERA: Just real quick, because something you said caught my ear. I'm always listening for the positive in the negative barrel of bad news.

You said cut rates? Could that actually happen next year, do you think? They will not only stop raising them, but cut them?

SWONK: So, our own forecast is that they have -- they will be cutting rates by the end of 2023. There's many within the Fed that just thinks they're going to hold rates high and slowly grind down inflation and raise unemployment.

They all agree there is some increase in unemployment out there. So they're still paying. Our view is that things will happen a little more quickly. There could be a shallow recession, but, by the end of the year, there will be in the game of cutting rates aggressively. We're not going back to zero again. We are going back to a higher underlying rate as the economy moves into the next phase of an endemic, and as we deal with this pandemic, and what is becoming much more structural labor shortages.

[13:05:10]

Unless we have major changes to productivity, growth and immigration, the labor problems we're having are not going away.

(DOG BARKING)

SWONK: Sorry the dog is barking in the back.

(LAUGHTER)

CABRERA: I was just thinking, I think your dog feels like a lot of us right now. And that is not happy about the economy and some of these different factors you are discussing.

Matt, prices are still much higher than normal. So where do things stand right now, especially on our everyday items?

EGAN: Well, I mean, I think the good news is that we have seen a plunge in gasoline prices. And that is a big relief, because we know that spike to record highs has really been harmful and was really painful for a lot of families.

I think the bad news is that sticker shock is real at the supermarket. We saw a 12 percent year-over-year increase in prices at the grocery store. Look at some of these big jumps. There were big increases in prices for butter, flour, bread, milk, eggs, 49 percent more expensive than a year ago. That's the biggest annual increase since 1984. This is painful, because these are everyday items.

You really can't escape it. It's unavoidable. And, Ana, it's another reminder that while overall inflation is cooling off, it remains way too hot in some areas.

CABRERA: If the cost of food is still up double digits, Matt, we have talked before, prices aren't necessarily going to go down, but they might not go up as much.

So, realistically, what does relief at the grocery store look like?

EGAN: Well, that's right. I mean, Fed officials, they are not trying to make prices go down, right? that wouldn't necessarily be a healthy thing. They're looking for a more gradual increase in prices.

Now, to give you some context, I went back and looked. And right before COVID hit, if you look at the last two months of 2019, we saw grocery store prices only going up about 1, 1.5 percent year over year. Now, that's probably not realistic to get anything like that anytime soon. But I think Fed officials are hoping that we go from this 12 percent increase for grocery prices to something closer to 2 to 3 percent over time.

And, of course, that would be very helpful. But one problem here, Ana, is, this is largely out of the control of the Fed. I mean, the spike in food prices has been driven by a lot of different factors, including extreme weather and the war in Ukraine. And there's really nothing the Fed can do with interest rate policy to impact those specific issues.

CABRERA: OK, Matt, we know you will be watching closely this announcement. Thank you for joining us. Our thanks to Diane Swonk as well.

Let's head to Capitol Hill now. And they're on the cusp of a deal. Top congressional negotiators have announced a bipartisan framework agreement to prevent a government shutdown.

CNN's Lauren Fox joins us.

And, Lauren, there's still some work that needs to be done on this funding package. So fill us in. Where are we? What else needs to happen?

LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Well, Ana, this process obviously getting a little bit of good news last night that they had reached a deal on a framework.

But a framework isn't a bill. And that's going to take a couple of -- a couple more days to really try to sort, out to write this legislation. I talked to the top Republican on the Senate Appropriations Committee, Richard Shelby, and he told me that it's probably going to take at least three or four days to write this bill.

There's always snags and things that come up in these disagreements between Republicans and Democrats, but he is confident they can get there. In the meantime, they are going to need a couple more days. So they're going to pass the short-term spending bill. The House is going to move on that tonight. We expect the Senate could do that tomorrow.

After all of that, they have to get the votes for the larger spending package that's going to go through September 30. That's going to be the big fight ahead. And that's really going to rest with Republican and Democratic leaders. My colleague Manu Raju just saying that Bernie Sanders is saying he will not support that larger bill.

That means that Republicans are going to have to come up with another vote. This is always a little bit of a math problem, a little bit of an arithmetic problem, but we do expect that this will pass. It may just be very messy right before Christmas -- Ana.

CABRERA: OK, Lauren Fox, keep us posted.

Now to the massive storms sweeping the nation. Millions of people right now are still under watches and warnings, with more blinding snow, more tornadoes still on deck after yesterday's deadly outbreak, one tornado striking Caddo Parish, Louisiana, here. A young mother and her son did not survive.

Twisters also destroying homes in Texas, Oklahoma and Mississippi. Today, families are left sifting through debris just 11 days before Christmas.

And in the Plains, travel is a total mess, zero visibility forced the police to shut down nearly 700 miles of one snowy interstate.

Meteorologist Jennifer Gray is in the CNN Weather Center tracking today's threats.

But, first, let's go to our Derek Van Dam. This is him there at a mobile home park in Louisiana that was destroyed.

And, wow, look at that giant car on its side, Derek. That speaks to how powerful that twister or whatever it was that swept through there

[13:10:07]

DEREK VAN DAM, AMS METEOROLOGIST: Yes, undoubtedly, Ana.

It has been such a devastating and just simply heartbreaking past couple of days for the Deep South, including here in Union Parish, where I'm located. And you said it just right. I have covered a lot of natural disasters, tornadoes, hurricanes, and it never ceases to amaze me the sheer power of what the wind can do.

Look at this truck, this flatbed truck that has literally been turned on its side just balancing here, windows completely crashed out. Looks like someone took a can opener and peeled back the top of this roof. There's wood and shrapnel laying over the street.

I saw this earlier. This is an iron rod. I mean, you can hear that. Can you imagine if that was flying at you 100 miles per hour? Obviously, extremely dangerous. The all-too-familiar sounds of a natural disaster, you can hear the alarms in the background going off from the various residences within this apartment complex.

But what was most astounding to me is what I'm about to show you. And what you're looking at here is about a 70-foot-long iron platform where a mobile home once stood. And this was actually lofted into the sky about 150 feet behind me over my right shoulder. That is where a mobile home park was completely decimated.

Only two of the eight homes in that particular mobile home park are left standing. And hoping to bring up these aerial visuals that we shot with our cameramen and their drone earlier today just to give you that perspective. You're probably seeing the foundations that were left on the ground.

The actual mobile homes were lofted and tossed about a football field's length into the forest behind the road, just off of the property there, and really very, very scary moments for the residents who rode out this tornado here in Union Parish.

But I want to look right into the camera because our severe weather threat is still ongoing across the South. Take this as a lesson. If you are preparing for severe weather today, you need to be ready to take shelter quickly because these storms hit at a moment's notice.

And it took the residents off guard here. You need to watch out for this line of storms coming through because it's headed your way, let's say just, to our east -- back to you, Ana.

CABRERA: OK, Derek, wow, those pictures really do tell the story.

Jennifer Gray is standing by to pick up where Derek left off.

Where are the greatest risks today, Jennifer?

JENNIFER GRAY, AMS METEOROLOGIST: Well, Ana, still in Louisiana, but they have moved more to Southeast Louisiana on into Central Mississippi.

And you can see all the lightning strikes down there. We're under a tornado watch for this region. And this is all part of that same system that brought the blizzard conditions across the North, severe weather yesterday, and it is still a very real threat. As this travel -- continues to travel to the east, we will continue to see these pop- up supercell storms, these storms that can produce tornadoes.

We have tornado warnings in effect. All of these hot pink boxes, those are active tornado warnings. Those indicate that a tornado could be in progress. So, if you're in these areas, of course, seek shelter, Southeast Louisiana on into Central Mississippi to the east of Jackson onto Meridian.

Here are all the tornado reports we had yesterday. A lot of these storms and these tornadoes came down during the overnight hours, when people are sleeping. And so that's why we see the nocturnal tornadoes to be even more deadly.

As we go forward in time, very strong storms will continue. We will see these through Alabama, Georgia. Florida Panhandle will also face some of these storms as we get into the overnight hours tonight. Still seeing snowy conditions on the northern end of the snow -- the storm system, rather, where we have visibility down to half-a-mile in Duluth, Bismarck the same.

So a lot of threats with this storm, Ana, everything from blizzard conditions to tornadoes in the Deep South.

CABRERA: OK, Jennifer Gray, Derek Van Dam, thank you both.

The race to stop a crisis with no end in sight. The Department of Homeland Security rushing more agents to the Southern border, as illegal crossings spike just days before a Trump era policy expires. We will take you there live.

Plus, a disturbing new report on abortion access. Why researchers say more mothers and babies die in states that ban or restrict the procedure.

And we now have the cause of death for soccer journalist Grant Wahl. What his widow, Dr. Celine Gounder, just revealed about his autopsy.

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[13:18:59]

CABRERA: The Department of Homeland Security is sending more agents to the Southern border, as illegal crossings spike just days before a Trump era restriction ends. Title 42, a public health order that allowed authorities to quickly expel migrants because of the pandemic, expires in just one week. And, without it. El Paso officials say they will be left with a federal crisis.

But a dire situation is already unfolding. In October, El Paso alone saw more than 53,000 border encounters. That's a 280 percent jump from last year. DHS says criminals are smuggling many of these migrants, including children.

Let's take you to the border right now to two people immersed in this issue.

Lauren Villagran is a border reporter for "The El Paso Times." And Blake Barrow is the director of the Rescue Mission of El Paso, a homeless shelter seeing a huge influx of migrants.

Thank you both for being with us.

Lauren, we have both covered the surges for years through multiple administrations. You have recently been reporting from both sides of the border. Help us understand, how is this surge different from others?

[13:20:12]

LAUREN VILLAGRAN, "THE EL PASO TIMES": Yes, Ana, I was down at the U.S. border fence this morning, where hundreds of Nicaraguan and other migrants are waiting in line to seek asylum or make another immigration claim.

Border Patrol tells me that they processed 400 people in this morning. Overnight, the temperatures went below zero, very, very cold. And this is -- it's foreshadowing of what we may see next week, when Title 42 ends.

Right now, the U.S. government cannot expel Nicaraguan migrants to Nicaragua or to Mexico. And they're lining up along the (AUDIO GAP) inside U.S. territory, but south of the border fence. So it's definitely a humanitarian crisis right now.

CABRERA: Blake, you run a homeless shelter. It wasn't intended to be specifically a migrant shelter. I know you're overwhelmed. What's your reaction to what's happening right now?

BLAKE BARROW, EXECUTIVE DIRECTOR, RESCUE MISSION OF EL PASO: Well, you're correct. This is all new for us.

And I have been at this position for 25 years, I have never seen anything like it. We would frequently get one or two people coming across from Mexico in the last few years, maybe a group of 10 from Cuba and another small group. And, all of a sudden, it's just a flood. So it is overwhelming.

All the beds in the shelter are full. We have got 190 beds. As you say, we were not built for this type of a situation. But we have all these people in need in front of us and we're doing everything we can. We're increasing the number of meals served, providing showers. We have people sleeping on the floor.

Last night, we had an immigration bus pull up and unloaded 35 single women. And we used a building that we have that was not intended for that purpose, but just on the spur of the moment basically opened another shelter and brought them in out of the cold.

CABRERA: So, you are scrambling. You are problem-solving on the fly here.

I know you could use more resources, more space, obviously.

Lauren, to be clear here, why now? Why this surge at the border even before Title 42 expires? I can't even imagine what that is going to look like afterwards. But it seems interesting to me that these migrants that are surging now aren't choosing to wait.

VILLAGRAN: Right.

Again, these are migrants that are already not subject to Title 42 because of the country they come from. The U.S. doesn't have a working relationship with Nicaragua. We saw something similar a few months ago with the Venezuelan migrants who were coming by the thousands.

And that migration only slowed down after the U.S. struck a deal with Mexico, under which Mexico agreed to receive Venezuelans expelled under Title 42. I spoke with DHS Secretary Alejandro Mayorkas yesterday in El Paso. He was here for an operational briefing. Not only does he say the federal government is going to be surging resources to border communities like El Paso.

He did confirm that the U.S. government is in negotiations right now with Mexico. I think, if we see any new limits on asylum or access to the U.S. border, it's going to require Mexico's cooperation. So, we're watching for that in the coming days. Title 42 does expire a week from today.

CABRERA: And let me just read a part of the statement we got about the current resources there.

This is coming from DHS, saying: "We have deployed additional agents to the region and have automated processing systems, automated surveillance towers, rescue beacons, mobile processing units, medical screening personnel, and nearly 1,000 Border Patrol processing coordinators in place for processing and border security." Based on what we just heard from Lauren, based on this statement, Blake, are you confident in the plan moving forward?

BARROW: No.

I mean, thank you for the help. They're doing what they can. But the influx of migrants is absolutely overwhelming. I don't see an end in sight. And it's obviously straining the resources that we have got, but we will keep on doing everything that we can do.

CABRERA: What do you think needs to happen? And are there any lessons learned from previous surges and how things were handled?

BARROW: We have never had a previous surge like this. So this is really unprecedented.

There was a time a few years ago that there was a surge of Cubans, that my understanding is they had been stopped in Panama. And, basically, the United States made an airlift from Panama to see Ciudad Juarez to bring the Cubans closer, so they could then cross over.

[13:25:21]

But, I mean, by comparison, that was 5 percent of what we're seeing now.

CABRERA: Wow.

Lauren...

BARROW: So, we have never seen anything like this. We desperately need guidance from Washington as to what an immigration policy should be and what are we going to do?

CABRERA: When it comes to at least state resources and action, Lauren, the GOP playbook has largely been from Governor Abbott in Texas, Florida Governor Ron DeSantis busing and flying these migrants to other places in the U.S.

What kind of impact has that had? What kind of message has that sent? Has it been a deterrent, or has it been an incentive for migrants to cross?

VILLAGRAN: Well, El Paso had a busing program for about three months, again, when that surge of Venezuelans reached the border.

And they were a very different group of migrants, in that they did not have in large measure a sponsor in the U.S. to receive them or to help them transit to other parts of the country. Governor Abbott's busing program is a little different from the busing program that existed in El Paso, in which El Paso was sending only those who did not have a sponsor.

Governor Abbott, as I understand it, was sending anyone who voluntarily would get on a bus. I don't know how much of that is an incentive. Many of the migrants who are arriving now do have sponsors and need only, in terms of what the rescue mission and other nongovernmental organizations are providing here, just a bit of respite and an opportunity to get their tickets to other parts of the country.

Border Patrol is processing people, doing criminal background checks before they are released to pursue an asylum claim. But, as Blake said, this is a surge that the El Paso area has never seen before. What happens in the wake of the end of Title 42 is anyone's guess at this point.

We have not heard from DHS yet what the plan is going to be, whether they will open the ports of entry to asylum seekers to make their claim in a more orderly fashion. But it's seven days away, so we will soon find out.

CABRERA: And, of course, there are still ongoing legal battles trying to prevent Title 42 from going away, from expiring.

Lauren Villagran, Blake Barrow, this is just the beginning of an ongoing conversation. Thank you for being there and for sharing your perspective with us.

Long COVID isn't just about long-term symptoms. A new report shows just how deadly it can be.

And Grant Wahl's sudden death stunned the sports world. Now we know how the journalist died, the news coming straight from his widow, a doctor, speaking publicly today for the first time.

(BEGIN VIDEO CLIP)

DR. CELINE GOUNDER, INFECTIOUS DISEASE AND PUBLIC HEALTH SPECIALIST: To know that he was so loved by so many people, it makes me feel a little bit less alone. It feels like that's -- it's like a warm hug when you really need it.

(END VIDEO CLIP)

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