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Pentagon Tracking suspected Chinese Spy Balloon; Blinken Postpones China Trip; Dangerous Arctic Blast That's Impacting Millions of Americans; Jaw-Dropping Jobs Report; Ford and Other Experts Predicts Car Prices Falling This Year; Domestic Abusers with Restraining Orders Can Now Have Guns. Aired 1-1:30p ET

Aired February 03, 2023 - 13:00   ET

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

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[13:00:00]

KASIE HUNT, CNN HOST: Good afternoon. I am Kasie Hunt in Washington.

Right now, U.S. tensions with China literally soaring. A Chinese spy balloon is floating above the continental United States, and we don't know what data it's collecting. You can see it right there on your screen. And it's visible to people on the ground in Montana. At least it has been since Wednesday.

Today, Beijing confirmed it is theirs, claiming it is a "civilian research airship" that went off course. But minutes ago, the Pentagon flatly rejected that claim, calling it a surveillance balloon. Secretary of State Antony Blinken's upcoming trip to China has now been postponed. The provocative move is inflaming a U.S.-China relationship that was already on the brink with tensions over everything from Taiwan to TikTok.

CNN's Natasha Bertrand is here to break it all down for us. Natasha, there is so much to talk about here. So, let's start at the beginning. What do we know about this balloon?

NATASHA BERTRAND, CNN WHITE HOUSE REPORTER: Yes, Kasie. So, here, just to get a sense for the scale of this thing, this is the balloon. And what we know about it is that it is the size of about three busses. It is very, very large. And you can see it with the naked eye. People have actually been taking photos of it and posting them on social media. This is not exactly a subtle intelligence component that the Chinese have allegedly deployed here.

And we also know that it's significant enough in terms of its size and in terms of just how obvious it might be to aircraft, that flights were actually diverted coming into Billings Airport in Montana just because the U.S. wanted to get a better sense of whether this thing actually might pose a threat to civilian aircraft. Now, the sense that we've gotten so far is that it does not because it is actually about 60,000 feet in the air, about twice -- a little under twice the altitude, of course, that airplanes fly at. So, in terms of where this thing actually is now, right? So, as of yesterday, we were told that it was flying somewhere over Billings, near the Malmstrom Air Force Base, which, of course, is significant because that is where the U.S. actually stores a lot of its intercontinental ballistic missiles. So, obviously, that would be kind of a pretty ripe intelligence target for the Chinese if they wanted to get a sense of what was going on there.

But we're told now from the Pentagon that it is actually started to move eastwards. They won't say exactly where it's going, but they say look, just look up in the sky because you can see pretty clearly if you are in the right place where this thing is going.

Now, I do want to get to China's claims, because they actually, as you said, have acknowledged that this is a Chinese balloon, but what they say is that it is not for intelligence purposes. It is actually for meteorological research and basically a weather balloon that strayed off course. This is a key claim that they're making. They're saying they really didn't have much control at all over this balloon. But the Pentagon is pushing back pretty hard on that today, just saying in a recent press briefing that they believe that, A, it is a fully capable intelligence arm of the Chinese government and that it is being used for intelligence gathering and also, that it does have some capability to be maneuvered by Beijing.

(BEGIN VIDEO CLIP)

BRIGADIER GENERAL PAT RYDER, PENTAGON PRESS SECRETARY: We are aware of the PRC's statement. However, the fact is, we know that it is a surveillance balloon, and I'm not going to be able to be more specific than that. And we do know that the balloon has violated U.S. air space and international law, which is unacceptable. And so, we've conveyed this directly to the PRC at multiple levels.

(END VIDEO CLIP)

BERTRAND: So, obviously, this is something the U.S. is taking very seriously. The secretary of state, Antony Blinken, has postponed his trip to China. It will be interesting to see how this plays out, whether the balloon just flies away or whether the U.S. decides to take some kind of kinetic action against it. Kasie.

HUNT: Yes. It's quite something to claim it just floated off course and somehow landed kind of in the middle of the American continent. Natasha Bertrand, thanks very much for that reporting. You've got the story of the day today, my friend.

Let's bring in former NATO supreme allied commander, General Wesley Clark and former CIA operative, Bob Baer. Thank you both so much for being here.

General Clark, let me start with you. Natasha alluded to this at the end. Currently, there hasn't been a decision made to shoot down this balloon. You are the most experienced among us in terms of knowing why that might be. What is your take on that decision? RETIRED GENERAL WESLEY CLARK, FORMER NATO SUPREME ALLIED COMMANDER AND CNN MILITARY ANALYST: Well, I think there are diplomatic consequences for what happens. I also think that we don't really know what's in the balloon. We don't know what it might do if it is attacked and so forth.

So, I think though that we're going to have to force this balloon down. This is a violation of U.S. air space sovereignty. It can't be permitted. And certainly, the Chinese would have shot something like this down if it went over China. So, tit for tat, this needs to come down.

[13:05:00]

HUNT: Yes. It certainly does seem that way. And can I just ask you, is there a way to figure out what it's collecting from up there, General, and/or to prevent it -- to jam it, prevent it from sending whatever it's learning back to China?

CLARK: There may be a way of determining what frequencies it's on. You might be able to break the digitalization of what the information is going back. I would say, that's unlikely. You do know it's reporting. You probably know it's reporting on multiple channels. You probably can get an aircraft close enough to take a picture of it. You can see what's there. You know what the technologies are of the Chinese and what the -- what you can see from that altitude.

So -- but that's what you would get. You need to have the balloon down and analyze it. And we've had a couple of cases over China where U.S. aircraft have been forced down. The Chinese have seized all the electronics. It's caused huge problems for the United States. We should take this balloon down and take it apart.

HUNT: So, Bob, obviously, I mean, we're looking at pictures of this. It is visible to the naked eye. A lot of people have taken video of it. It's all-over social media. I mean, this makes it seem so incredibly brazen and escalatory. I mean, is that the point here? I mean, do you buy the idea that it's a mistake or do you think they're doing this on purpose?

ROBERT BAER, CNN INTELLIGENCE AND SECURITY ANALYST AND FORMER CIA OPERATIVE: Oh, they're doing it on purpose. They know that balloon was maneuvered over Montana. Undoubtedly, I agree with General Clark, it's sending back encrypted communications, which means it's not a weather balloon. It's a provocation. The Chinese are sending us a message. Is -- and I think the message is, we're getting serious about Taiwan, don't get in our way, and by the way, we are capable of targeting your minuteman bases in Montana and North Dakota.

And I think the escalation is what concerns me. Are we moving closer to a war? We've had a general come out and say we are two days ago. I'm sure this is worrying the administration, and for Blinken to cancel his visit to Beijing, it means relations with China are very, very bad.

HUNT: So, Bob, do you agree with the general's assessment that it should be taken down, considering your evaluation of the provocatory nature of this?

BAER: Oh, absolutely. It's a spy balloon. The Chinese would take our -- probably taken our planes down that weren't flying in their air space. They forced them down. We let it go. We keep on appeasing the Chinese and they'll keep pushing.

HUNT: So, General, as Bob notes, this is just a couple of days after the U.S. moved forward with plans to access military bases that are very close to Taiwan, based in the Philippines, do you think this is a direct response to that or do you think this was something that was already in the works before we all learned about that publicly?

CLARK: Clearly in the works. Probably in the works for a year or two, maybe longer. This is part of the Chinese plan of putting pressure on. This shows the weakness of America in the Chinese eyes. We don't know what's really in that balloon. We don't know what it's collecting. We know that previously, we brought Chinese drones to do emergency surveillance of our cities. The Chinese used these drones to collect information on our infrastructure. We know that. We tried to get the drones out of our system, haven't been too effective with that.

Look, this is of all society effort by China to pressure the United States. And as Bob said, this balloon needs to come down. It needs to be analyzed. Not just destroyed, but analyzed. Take it all apart. Learn what we can learn from it.

BAER: The sooner the better.

HUNT: Yes. I certainly would be fascinated to know what we could learn from this balloon. I mean, so, Bob, the way that the PRC responded to this, they did acknowledge, OK, it's ours. They claim that they "regret" that this had happened. What do you make of the language and the way that they have framed their public response?

BAER: Well, this is the foreign ministry coming back trying to cool things down, but we really don't know what the military is doing, the Chinese military. It's very aggressive. It's run by hardliners. And if the Pentagon says this is a spy balloon, it's a spy balloon. They know what a spy balloon looks like.

You know, we've been monitoring these things for years. We know the Chinese capability of using these spy balloon for low powered communications, for instance, for radiation signatures, on and on, is very good, and it's getting better. So, this spy balloon is both a provocation and an ability to monitor our military bases and if that's what the Pentagon says, I believe it.

[13:10:00]

HUNT: Yes. So, General Clark, you already mentioned that we think -- you should think that this balloon should come down. What other diplomatic steps do you think we should take? Balloon postponed his trip, should it be canceled altogether? What else should be on the table?

CLARK: Well, I think the most important thing we get to the Chinese directly on this incident. So, they should have control of that balloon, they should lower it immediately. And the Chinese government should take responsibility to -- for lowering it, putting it down so that we don't have to shoot it down. We expect it to come down, and that's their responsibility. If they won't, then we have to do what we have to do. But let's not broaden the issue. Let's keep it on this issue, the balloon, right now is the issue.

HUNT: All right. General Wesley Clark, Bob Baer, I could talk to both of you about this all day long. Thank you so much though for getting us started today. We really appreciate your time.

We're going to go now to the dangerous arctic blast that's impacting millions of Americans. Right now, wind chill alerts are in effect across the Northeast. Some places feel like 40 degrees below zero, and it's only going to get colder.

Let's bring in Meteorologist Jennifer Gray. Jennifer, good to see you. Forecasters like yourself are calling this a once in a generation deep freeze. Can you put this in context for us and how dangerous is it?

JENNIFER GRAY, CNN METEOROLOGIST: Yes. It's going to be really dangerous. These are temperatures that we aren't used to seeing. A couple areas will see the coldest temperatures they've seen in decades. And so, we could see areas, some big cities across the Northeast and New England where frostbite could set in as little as 10 minutes at times.

I want to show you one extreme example. This is Mount Washington Observatory right now where the temperatures are 35 below zero, and it feels like 92 below zero. Now, this is at 6,000 feet. They have wind gusts over 100 miles per hour. Of course, no one lives up here permanently, but we do have scientists that stay in the observatory 24 hours a day. So, there's a couple of people up there right now monitoring the situation. It is wild.

Across the rest of the Northeast and New England, we have temperatures in the single digits for Boston. New York City is at 10, but it's going to get much colder. And just to put this in context, 30 degrees below zero, your frostbite could set in 10 minutes. 50 below in five minutes. So, it could happen very, very quickly. And we'll put some of the temperatures on here.

Bangor could see temperatures feel like 34 below zero by Friday afternoon. That's frostbite in 20 minutes. Albany could see frostbite within 20 minutes by the time we get to Saturday morning or overnight tonight into tomorrow morning. 15 minutes in Boston with your feels like temperature close to 40 below zero. 24 below zero is what it will feel like by tomorrow morning. So, tomorrow morning is going to be the coldest we'll feel, and then, temperatures will gradually warm up from there.

We have wind chill advisories, wind chill warnings in effect. And basically, the wind chill is when it's windy, the heat is -- that your body produces is basically blown away from you. So, you have the capability to get colder much faster. And so, we're talking about the dropping temperatures at 4:00 a.m., Portland, 29 by 4:00 a.m. Six now. Burlington, seven, dropping to eight below. So, we are going to see those temperatures drop rapidly.

So, this arctic blast, the good news is, it isn't going to last very long. We are going to see temperatures start to moderate Sunday especially into Monday. So, taking Boston, for example, temperatures dropping to seven below zero tonight. Wind chill will make it feel much colder. And then, we'll warm up to a balmy 18 degrees by Saturday. But then, we're back above normal already by Sunday, Kasie. So, the good news is, it's short lived, but it is going to be extreme and people need to definitely take precautions.

HUNT: A balmy 18 degrees, I have to say, I am very happy to be down here in Washington and out of the way of this. I hope everyone who is in its way is very careful out there. Jennifer Gray, thank you very much for that reporting.

Coming up next, it's shockingly good, but is it too good for the Fed? What today's blockbuster jobs report could mean for future rate hikes and the big recession debate.

Plus, they claim their coach sexually abused them, and that the U.S. Olympic Committee and others covered it up. The accusations rocking the U.S. snowboarding world.

And police make an arrest after two rare monkeys were stolen from the Dallas Zoo. How they found the suspect, ahead.

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[13:15:00]

HUNT: The new jobs report out today is shocking analysts and rattling the markets. More than half a million jobs were created in January, nearly triple expectations. The blockbuster numbers could force the Fed to rethink its strategy to fight inflation. CNN's Matt Egan joins us now to break it all down. Matt, what does this jobs report tell us?

MATT EGAN, CNN REPORTER: Well, Kasie, clearly 2023 is starting with a bang for this economy. Look at today's job numbers. 517,000 jobs added. The expectation was just 185,000. Even the most optimistic economist was only expecting 305,000. So, this is off the charts.

And here's why it's surprising. This shows job growth over the past year, and here's when the Fed started to raise interest rates. And you could see job growth, for the most part, slowed down, and then, boom, you have today's number. That is very surprising to see this acceleration, and this has lowered the unemployment rate to 3.4 percent. That is not just a post-COVID low, this is the lowest since May of 1969. Just before Neil Armstrong and Buzz Aldrin walked on the moon. Pretty incredible.

[13:20:00]

It's also surprising because we keep hearing about all these tech layoffs, Amazon, Meta, Microsoft, Alphabet, all these companies have laid off thousands of workers. Two important things to remember. One, tech is a small part of the economy overall. And two, these workers have in demand skills, they can quickly get rehired. So, today's numbers suggest that a lot of bosses across the economy, they're more worried about letting go of the workers they have than keeping the ones that they have.

HUNT: So, basically, the bottom line, it seems to me, is that you're saying that this was way, way hotter than expected and with the Fed trying to cool down the inflation rate, that raises some questions about what the Fed is going to do now, right?

EGAN: It does, Kasie. You know, I think the Fed has got to be taken aback by the strength of this number. But what's important to remember here is where wages are. So, the blue line here shows wages. The green line is inflation. And what you can see is that inflation is coming down, which is what the Fed wants, but wages are also cooling off despite the fact that job growth remains strong. And so, that is encouraging and that could give the Fed room to continue to slow the pace of interest rate hikes and maybe even pause interest rate hikes altogether.

HUNT: So, what are experts saying about this? Because there are still some that are warning that we are headed for a recession. I think for a lot of us who -- I mean, you cover this for a living, I typically cover politics for a living, there's a lot of confusion out there about what the heck is going on with these trend lines?

EGAN: OK. So, there is a lot of confusion. I mean, I'm hearing two things today. One, disbelief at the strength of these numbers. And two, some cautious optimism. I mean, there are a lot of positives about this economy. Obviously, the historic jobs growth, the fact that inflation is cooling is huge. Rate hikes again, they are easing. And overseas growth has rebounded.

But there's also some negatives. Manufacturing is shrinking. The housing market has gotten crushed by the spike in mortgage rates. And this is the really big key one, rate hike impact still hasn't been totally felt. It takes six months or so to feel the full impact of these interest rate hikes. So, the question is, whether or not the Fed is going have to continue to raise interest rates. Because at some point, that could deal a real blow to the jobs market.

But for now, by all accounts, this jobs market is so much stronger than anyone imagined it would be at this point. Kasie.

HUNT: It sure is. All right. Matt Egan, thanks very much for helping us understand all that. Really appreciate it.

And here's a little bit of good news. If you have been holding off on buying a car, Ford Motor Company and other experts predict that some prices may actually fall this year. CNN's Vanessa Yurkevich is here with a closer look at this.

Vanessa, no pun intended, but what's driving this?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Well, pun intended, Kasie, what is driving this is, in fact, that we have more new cars on the market right now. In 2021, we saw such a supply chain crunch. Manufactures could not get computer chips to make new cars. So, now, we are seeing that supply chain catch up, and that is why Ford is saying that they may be offering 5 percent discounts on cars, and maybe steeper discounts later in the year.

But it's important to note that overall, new car prices are still up about 5.8 percent year over year looking December backwards. And then, you also see, though, however a slight decrease from November to December, and how this translates to your wallet is as follows. If you were buying a new car in the spring of 2022, you may have been paying $700 above sticker price.

But in December of this year, around today's time, you may have been saving about $300 on that sticker price. So, some savings, Kasie, but it's important to note, Ford, Tesla, yes, announcing some deals on cars, but it's not all manufacturers and that's important to note when you're shopping for your new car.

HUNT: For sure. Now, what if you're shopping for a used car? What's the picture look like there?

YURKEVICH: Better news on the used car front. In June of 2021, we saw used cars going for 45 percent increase year over year. That is a huge, huge number. We were hearing stories about people selling their used cars for more than they purchased them for.

But then, let's look at December of 2022. You actually are seeing now a decrease in used car costs by 8.2 percent. And that is dropping steadily month over month over 2022. And that, Kasie, is simply supply and demand. You have more new cars on the market so there is less demand for used cars. Kasie.

HUNT: All right. Vanessa Yurkevich, thanks very much for helping us understand that as well. We really appreciate it.

Coming up next, it was meant to keep guns out of the hands of alleged domestic abusers with restraining orders. But now, an appeals court has struck that law down. What the Justice Department is planning to do next.

And another lawsuit involving U.S. athletes and alleged sexual abuse. We'll have the details coming up next.

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[13:25:00]

HUNT: An appeals court has ruled that a federal law to keep weapons away from people with domestic violence restraining orders against them is unconstitutional. It's a concerning development given the statistics.

[13:30:00]