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Any Moment: Fed To Decide On Interest Hike Amid Fears; Suspect On Loose After Shooting Two Staff Members At Denver HS; New Russian Strikes Hit Civilian Targets In Kyiv Region, Zaporizhzhia. Aired 2- 2:30p ET

Aired March 22, 2023 - 14:00   ET

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

[14:00:00]

BRIANNA KEILAR, CNN ANCHOR: But the booze maker is not laughing. Its lawyers say, bad Daniels -- bad Spaniels, pardon me, is likely to confuse consumers and harm Jack Daniel's brand including by associating whiskey with excrement and toys that appeal to children. The bad Spaniels maker says the toy is clearly a joke, and that parody is protected under the First Amendment.

So, why is this case in front of the justices? Well, the White House actually asked the court to take it the Justice Department is siding with Jack Daniels, Nike, and Levi Strauss also supporting the Whiskey maker. The Supreme Court could wind up issuing a landmark ruling in this case. We'll keep you posted. That's it for us. More breaking news right now.

BORIS SANCHEZ, CNN ANCHOR: Hello, and welcome to the CNN NEWSROOM. I'm Boris Sanchez.

JESSICA DEAN, CNN ANCHOR: Hi, everyone. I'm Jessica Dean. Great to be with you this afternoon.

Any moment now, the Federal Reserve will announce whether or not it will raise interest rates yet again. This decision, of course, is critical in the fight against inflation, and it will impact everything from home prices to credit card bills to car payments.

SANCHEZ: But today's decision is especially crucial. It comes as the country faces a banking industry crisis. The central bank has to decide whether to march on with these historic rate hikes or pause and give the financial system time to recover.

So, let's take you live right now to the Federal Reserve where seeing as Matt Egan is tracking the very latest. Matt, what was the Fed's decision?

MATT EGAN, CNN REPORTER: 25 basis points the Federal Reserve just delivered its ninth straight interest rate hike. That comes despite the fact that there is this bank crisis of failure of banks that actually prompted some experts to call for the Federal Reserve to pause this interest rate campaign.

Now, today's move lifts borrowing costs from the Fed to the highest level since September of 2007. It was right before the Great Recession. And interest rates are going up rapidly at the fastest pace we've seen since the early 1980s. All of this, of course, is part of this campaign to get inflation under control. For everyone at home, that means higher borrowing costs, mortgage rates, credit cards, car loans.

Now, the Fed also inserted significant changes to its statement to acknowledge these bank failures, the biggest that we've seen since 2008. The Fed had sort of a new paragraph that says the banking system is sound and resilient. They say that recent developments are likely to cause tighter credit conditions and make it harder and more expensive for families and businesses to get loans.

They say that's going to slow down the economy. It's also going to weigh on hiring and inflation. And the Fed acknowledges that the extent of the banking crisis is uncertain. But the Fed is making clear through today's move that they are definitely focused right now, despite all the banking pressure on getting inflation down.

DEAN: And, Matt, you kind of outlined a little bit what the Fed was saying more broadly about its economic projections there. Is there anything else you want to kind of expand on there that people should know at home?

EGAN: Well, the -- yes. So, that -- the Fed also changed its assessment on the economy somewhat. They're making clear that the economy is running hotter than they want it to. Now, they say the job gains have "picked up in recent months."

They're also getting more pessimistic in some ways on the inflation outlook. They took out a line that previously said inflation has eased. They say inflation remains elevated. The Fed also issued new projections on where they see the economy going.

And importantly, the Fed didn't really change where they see interest rates going. They still think they're going to have to raise interest rates probably one more time, one more quarter-point move. They also made some changes to the unemployment rate. They actually upgraded their view on the unemployment rate. They now see the unemployment rate going up, but not going up quite as high as before. They also upgraded their view on inflation, though, they do think that it's going to take some time before inflation gets back to normal.

DEAN: All right, Matt Egan -- Matt Egan, stay with us. We're going to bring in CNN Economics and Political commentator, Catherine Rampell of the Washington Post, Catherine, great to see you. I just want to ask you first, we know that the Fed was really trying to do a delicate balancing act here between controlling inflation and also dealing with this baking instability that we've seen over the last several weeks. Was this the right call?

CATHERINE RAMPELL, CNN ECONOMICS & POLITICAL COMMENTATOR: This is certainly what markets were expecting. If you look at where forecasts were and how contracts were priced prior to this announcement, there was a very high probability in the markets that the Fed would raise rates by 25 basis points. So, to the extent that they don't -- you don't want to surprise markets? Yes, I think this was the right call.

I think either a modest hike like the one that they did or a pause could have been warranted. However, the Fed needs to communicate and I think that is part of why they decided to raise rates, that the war on inflation is not yet over.

[14:05:04]

They are confident in the banking system. They're not worried that a modest hike of 25 basis points will break the financial system. They have other tools to deal with that. Hopefully, they are deploying them competently. But that, moreover, the main war is the one on inflation.

And if you look at in fact, some of those other projections that Matt was talking about that came out today, not only did they modestly improve their forecasts -- the median forecast anyway for what happens to unemployment, they did not change how high they forecast interest rates will ultimately go or again, at least the median forecast was basically about the same. There had been this question of, well, might the Fed get a little bit scared of its shadow and decide

Maybe they're not going to pause today, maybe they will pause today but they're going you know, either way, they're going to communicate that they're going to let off a little bit, you know, lay off a little bit in the months ahead. And they're saying, no, nothing has changed. The trajectory is the same. We're still fighting inflation. We're still barreling forward.

SANCHEZ: Yes. And there was -- just as Matt pointed out the omission of any reference to inflation cooling, which clearly indicates that they are not comfortable with more than 6 percent inflation, they wanted to get down to 2 percent. So, looking into the future, how aggressively do you think the Fed is going to go? Do you think that they might hesitate next time around, depending on where the banking industry is?

RAMPELL: Well, the Fed keeps on saying that they are data dependent, that is one of chair Powell's favorite terms, so I think we're really going to have to see what the inflation numbers look like -- the inflation numbers, among other metrics, by the way, what they look like in the months ahead. You know, the reason why that language was taken out about inflation cooling, presumably, is that there was a reversal in the numbers. It looked like inflation was moderating and then some other recent data that we got in in the last month or so has indicated that maybe that's not the case.

So, I think they are going to be paying close attention to what the numbers look like in the months ahead. I know that there are some forecasters who are predicting that later this year, the Fed -- you know, things will get so dire the economy will weaken so much that the Fed will have to cut rates. The Fed is not predicting that right now, right? They are saying, you know what we've seen so far, what we've seen to date indicates that we will have to continue raising rates for a little while yet. So, I think that's what we should assume is the case until the data come in otherwise. DEAN: And, Matt, I want to get to some new reporting you have. It was a letter that was -- that was shared exclusively with CNN about -- from Senator Elizabeth Warren and several other senators. They want to crack down on these more regional banks -- the larger regional banks, that she also was no fan of Jerome Powell. What more did you learn?

EGAN: Well, there was -- there is a push from Democrats, specifically progressives led by Elizabeth Warren to get the Federal Reserve to really crack down on regulation on these large regional banks, the ones between a hundred billion and $250 billion in assets. And this is because of the failure of Silicon Valley Bank and Signature Bank.

Now, they're trying to get legislation through Congress. I don't know if that's going anywhere. But in the meantime, they are urging the Fed to sort of act unilaterally and ramp up supervision on these banks because of the stress that we've seen and this concern that the 2018 rollback of Dodd-Frank went too far.

And so, we should expect to hear some questions to Jerome Powell today about this issue. I mean, he's got to talk about, first of all, what the stress in the bank market means to the economy. I mean, how much is it going to slow down interest -- slow down the economy? At what point does it cause the Fed to pause interest rates?

He also has to talk about whether or not he's concerned about more bank failures. And then lastly, he's got to answer questions about what went wrong here, including the regulatory front at the Fed. How some of these red flags about these banks were missed? So, after a very difficult decision made here by Powell and his colleagues to raise interest rates, a decision I should note was unanimous, now he's going to face some tough questions about the road ahead.

SANCHEZ: Yes. Powell certainly going to face some scrutiny. And for our very perceptive viewers, they just saw a bit of a tease, because the author of that letter that Jessica mentioned, Senator Elizabeth Warren is going to be with Jake Tapper on The Lead at 4:00 pm today. Also, at 4:00 p.m. the bell is closed, we'll see -- or the markets close I should say. The bell rings we'll see how markets respond to these 25 basis points. Catherine Rampell, Matt Egan thank you both so much.

DEAN: Let's get you now to some breaking news out of Denver where a male student reportedly shot two faculty members at East High School. Those two faculty members have been hospitalized.

[14:10:00]

SANCHEZ: Yes. CNN's Whitney Wild has been tracking all of this for us. Whitney, one of the victims is in serious but stable condition. The other is now in surgery and in critical condition. The student though is not in custody, he apparently fled the scene after the shooting.

WHITNEY WILD, CNN LAW ENFORCEMENT CORRESPONDENT: That's right. And police say that he is armed and dangerous. And they recognize that there may be a risk to the greater public. Right now, they are asking for the public's help trying to find this suspect. They say he's a juvenile that's why they're not releasing his name, but he was under 18 years old. He was a student at the school.

According to Mayor Michael Hancock, the mayor of Denver, he was an African American juvenile. He wears an afro and he had a hoodie that had an astronaut on it. That's a description that we're putting out to the general public hoping of course the public doesn't approach him, but the public can help police find this suspect.

This all happened around 9:50 Mountain Time when the student was undergoing a daily safety check. According to police, he had been patted down every day, and had never produced a handgun before but today things were different. Here's the police chief.

(BEGIN VIDEO CLIP)

RON THOMAS, CHIEF, DENVER POLICE: This particular student actually had a safety plan that was in a place where they were to be searched at the beginning of the school day every day. They had been searched previously to today and had never had a weapon on them before. However today, during that search, which was -- which took place away from other students, away from other school staff, they did produce that weapon and fired shots.

(END VIDEO CLIP)

WILD: No students were injured in the actual shooting but there was a student who witnessed what happened and had such a -- such a deep emotional reaction -- a physical reaction to the incident. That student was also hospitalized. It just so happened that at the very same time the shooting happened, there were paramedics inside the building responding to another medical incident with a student.

Boris, they were able to rush to this scene and they were able to administer aid within seconds of this happening. And so, as you mentioned, one of those faculty members is in stable condition, alert enough to give a description of what happened. The other is in surgery and in critical condition.

But according to Mayor Michael Hancock, it is the quick action and just the sheer good luck of having paramedics inside that building that will likely contribute you know, hopefully -- at least certainly saving the life of the faculty member who is in stable but hopefully saving the life of the other faculty member who is in critical condition. Back to you.

SANCHEZ: Incredibly fortunate that those paramedics were there. Whitney Wild, please keep us posted on what comes out of East High School. Thank you so much.

Now, to the ongoing waiting game indictment watch and whether the nation will see something it is never seen before, a former American president under arrest. Some of his advisers say that Donald Trump appears resigned that it is going to happen. And he's apparently even toying with the idea of making this into a media spectacle.

DEAN: Yes, the New York Times is reporting that Trump is ready for his perp walk. In the meantime, some supporters have gathered near his home at Mar-a-Lago in Florida hoping that he'll see that they're there for him.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: All I know is that he can at least from video, see that he has people that really love him and that we're not deceived by the media, we're not put off by what we hear, that we still believe in him.

(END VIDEO CLIP)

DEAN: Let's turn now to CNN Senior Legal Affairs Correspondent Paula Reid. And, Paula, you got some breaking new details on this grand jury and how today is playing out for them.

PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: That's right, Jes. We learned that the grand jury is not meeting today. And is that significant? Well, grand juries don't meet every single day, particularly when they don't have any work to do. It's unclear if they're going to meet tomorrow.

But what we've learned is behind the scenes, prosecutors in recent days have reached out to an attorney for at least one witness and signal that that individual may need to come back before the grand jury for additional testimony. Because one of the big questions here is whether the grand jury is actually done hearing evidence that they could even move to a vote on a possible indictment. But right now, our reporting indicates that there could be at least one other witness who goes before the grand jury before it can move ahead to that vote.

Now, we've also learned from multiple sources that behind the scenes, the District Attorney's Office, prosecutors there, they're taking a moment to just contemplate the historic nature of what they may be doing here, again, being the first indictment potentially of a former president and they're just taking a moment to regroup. It's been an unexpectedly busy week. On Monday, they had a defense witness go before the grand jury, something that is allowed but somewhat unusual because that was a request from the former president's legal team.

That was Robert Costello. He went on as an attorney -- a former attorney for Michael Cohen to attack Cohen's credibility. That's significant because Cohen is really at the center of this case. So, it -- unclear right now, if the grand jury will meet tomorrow if they will hear from another witness that we know, it is possible.

[14:15:02]

Now, if there is a vote on an indictment this week and if the former president is indicted, we are told that his initial appearance in court would not be until next week.

SANCHEZ: And notably, Trump has an event in Waco, Texas this week. And we'll see if he follows through with that if he is in fact indicted. Paula Reid from New York. Thank you so much, Paula.

Let's get to CNN legal analyst Jennifer Rodgers. She is a former federal prosecutor. Jennifer, this pause in the action, as Paula just described it, the reporting that they're taking a moment to regroup. What do you make of that?

JENNIFER RODGERS, CNN LEGAL ANALYST: Well, not too much, Boris, because we don't know exactly what it means. I mean, we know that they had a witness in on Monday, they need to take some time to absorb that and think about what the grand jurors thought of that. Sometimes GRAND Jurors themselves asked for more information or testimony after hearing from someone. So, I'm not surprised that they wanted to absorb what they heard on Monday, think about whether there's anything else they want to do.

As we all know, this is completely uncharted territory, right, charging a former president. So, I think it's very wise. I'm glad that Alvin Bragg and his team are thinking through everything they need to think through before actually asking for that indictment. So, I don't make too much of it other than they're doing what they should be doing.

SANCHEZ: And, Jennifer, I have a follow, turning specifically to New York's prosecution of Trump. The New York Times did bring up an interesting point. Check this out. "New York State prosecutors have never before filed an election law case involving a federal campaign. Bringing an untested case against anyone let alone a former president of the United States carries the risk that a court could throw out or narrow that case." What's your take on that? Does that make the prosecution harder for the DA?

RODGERS: Well, it certainly makes it a little bit harder to figure out what's going to happen, right? I mean, there's a first time for everything. There's no reason not to bring a case because of the particular way that you're charging, it hasn't been done before if you think it's well grounded in the law, and you have the facts to support it. So, if they choose to proceed this way, it will be because they think that they can get this case through and it will hold up.

Now, it's possible that they're wrong. And this doesn't affect the underlying misdemeanor of falsifying records, but it would affect the elevation of that to a felony. And if they're wrong, it could get thrown out before trial, it could actually get through to trial and after conviction, it could get thrown out on appeal.

So, there are some unknowns here. But you know, they need to make their decision based on what they would do in any other case. No one is above the law. So, if they would bring this case and they would bring it in this way, against anyone else, I think they should bring it against Donald Trump. And, you know, see what happens. Make their best arguments, made in good faith, and we'll see where the chips fall.

DEAN: And, Jennifer, before we let you go, we've got new details on one of the separate cases against the former president. This is the federal case in which we learned kind of overnight that the DOJ -- the Department of Justice has convinced a federal judge that Trump used his attorney in the furtherance of a crime. This is in that classified document's case, how significant is that development?

RODGERS: So, this is really interesting. Judge Beryl Howell on her last day as the chief judge issues this ruling that not only does Evan Corcoran, the former president's lawyer have to testify and cannot invoke the attorney-client privilege anymore like he did the first time but they have to turn over notes and other information about the conversations that he had with the former president.

This goes directly to whether the former president obstructed justice, but it also goes to the underlying crime about the documents because what happened was, Evan Corcoran was representing him in front of the National Archives, and with DOJ representing her his client statements that there were no more documents, they had done a diligent search.

And now Judge Howell is saying effectively that the former president lied to Evan Corcoran about that. So that's going to be very, very fruitful terrain, I think, for DOJ to mine with Evan Corcoran. And if it is that it is, as it is -- as it is reported to be and that's of course, a big F. We'll have to see what they actually get out of openness. It could be really huge.

DEAN: Yes. It's something to watch, for sure. All right. Jennifer Rodgers, thanks so much. We appreciate it.

RODGERS: Thanks.

DEAN: Ukrainian officials say Russia is launching direct attacks on civilians after a missile strike hits an apartment block in Zaporizhzhia. We're live in Ukraine. Next.

SANCHEZ: And after calling it a hit and run for years, South Carolina Investigators now say 19-year-old Stephen Smith died from homicide. How this all stems from the Murdaugh murder investigation? Ahead.

(COMMERCIAL BREAK)

[14:23:38]

DEAN: A new barrage of Russian missile strikes targeted citizens in Ukraine today killing at least eight. Emergency services on the ground telling CNN a drone strike hit a residential building in the region that surrounds Kyiv.

SANCHEZ: Meantime, there was a separate Russian attack on an apartment building in Zaporizhzhia. At least one person was killed there, dozens more are missing and injured including kids. Officials in Ukraine say that there are no military targets nearby. They're calling this a deliberate strike on civilians.

Joining us now with CNN's David McKenzie, who's live for us in Ukraine. David, officials say that people are still missing and potentially underneath that rubble.

DAVID MCKENZIE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, that's right, Boris and Jessica. It's been a desperate search for survivors on this awful strike in Zaporizhzhia. The strike happening in broad daylight hitting that apartment building. You know, people describe how they were rescued or saved by even the smallest of margins. Ukraine is saying this is a deliberate strike impossible to verify that. But certainly, every single day, it seems Russian missiles, artillery shells, and drones are hitting civilian areas and killing civilians, sometimes very far from any military positions.

We've been in Kherson, close to Odessa for two days on and off where you see these incoming -- and you hear the incoming rounds and the rocket strikes, which just in the last few days have hit the city multiple times. This is the fear that civilians are living with here.

DEAN: And walk us through this. We also know that there have been some developed developments on U.S. weapons that are heading to Ukraine. But the -- I guess the question is, are they arriving quickly enough?

MCKENZIE: It's a great question, Jessica. You know, President Zelenskyy, as we know by now is continuously agitating to get weapons in more quickly. And the reason is you get a sense of Ukrainians are really trying to build up their forces, their strategy, and their armaments for a counteroffensive to take on this endless bombardment from the Russians and push the frontlines back.

The latest news is that the U.S. government has committed to send those Abrams tanks, a slightly older version to Ukraine as soon as this fall. And more than 30 of them that's definitely significant. And also, the Patriot missiles systems, they say Ukrainians have been quick learners. They might or might also come in the coming weeks. I think all of this is important from the Ukrainian perspective. If it comes fast enough, that's the question because they certainly calling for it as fast as I can get it. Jessica and Boris.

BOLDUAN: All right, David McKenzie, really laid it out for us there in Odessa, Ukraine. Thanks so much.

SANCHEZ: And as we get those updates from the front lines in Ukraine, that highly anticipated meeting between Vladimir Putin and Chinese President Xi ended without a thorough discussion of that Chinese peace proposal for the war in Ukraine. The two leaders made it clear though, that their partnership is strong and only going to grow.

DEAN: Historian Douglas Brinkley is joining us now. Douglas, it's great to see you. There's clearly a desire here from Putin and Xi to disrupt this world order that's been in place now for decades. What are the chances of that happening, and what should the U.S. expect in the coming years?

DOUGLAS BRINKLEY, CNN PRESIDENTIAL HISTORIAN: Well, I think the disruption just happened. You know, look, the Russian-Ukraine war is taxing everybody. It's become a which side are you on, scenario. You know, Japan, for example, and Great Britain or NATO allies are all with Ukraine with us. China is seeming to pivot to Russia. And that means a problem for the United States. We still have great trade agreements with China. There are great economic partners. But on issues of energy and security, military affairs, global world strategy, we're seeing the tilt to China with Russia.

And I think history will treat this summit meeting with President Xi and President Putin had as being an epic moment because we're now seeing as you just showed on the clips of what's going on in Ukraine, a Putin coming home feeling very empowered that China has his back, that he's going to be able to get money out of them through his energy corridor, gas, petroleum minerals, and much more. So, it's been a very exasperating week if you're worried about the U.S.-Chinese relationship.

SANCHEZ: Doug, I'm really fascinated by the way you describe the world sort of moving into different camps or different blocks if you will. It's very reminiscent of the Cold War. And I'm reminded of the language that Xi Jinping has used recently talking about the U.S. strategy of containment against China. And his desire to have China and Russia be the guards of the world order. Is this headed toward a new Cold War?

BRINKLEY: I think now it is. I hate to say that. I'm a Cold War scholar by nature. You know, I wrote a biography of Dean Acheson, Harry Truman's Secretary of State, and studied George Kennan's containment strategy against then-Soviet expansion after World War Two. But we're seeing under Putin in expansion, first into Crimea, then into Ukraine, he has a -- desire to be the Peter of -- the great of our time.

And China's getting fed up with the United States. They have a long- term strategy of strengthening or taking over their ties with Taiwan. They'd like to minimize America's military presence in the Pacific. They're doing technology heists from us all the time. You know what, right now in Congress, Senate's talking about getting rid of TikTok.

There's kind of a -- were at loggerheads. And it's not good because back when Nixon was president during the Cold War when he went to China in 1972, he was wedging Russia away from China and playing this middle ground between them both. Right now, I see China on with Team Russia, certainly in Ukraine, and certainly on their vision for having an authoritarian world order, not a democratic one like we fought for under Franklin Roosevelt in World War Two.

DEAN: Right. And you know, it's interesting, Douglas, because yesterday we saw Xi and Putin together, they're in Russia. But then we also saw the Japanese Prime Minister on the ground making that surprise visit to Ukraine.