Return to Transcripts main page

CNN Newsroom

Hugh Money Grand Jury Meets Today; Trump Lawyer to Testify Tomorrow in Classified Docs Probe; Fed Hikes Interest Rates a Quarter- Point Amid Banking Turmoil; Police Says Student Suspected of Shooting at Denver High School Found Dead; TikTok CEO Testifies Before House Committee Amid Calls to Ban the App. Aired 9-9:30a ET

Aired March 23, 2023 - 09:00   ET

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

[09:00:15]

JOHN BERMAN, CNN ANCHOR: Good morning, everyone. I'm John Berman.

ERICA HILL, CNN ANCHOR: And I'm Erica Hill.

Today could, could be the day a grand jury decides whether to indict former President Donald Trump. Keep in mind never in the nation's history has a sitting or former president been charged with a crime. So this, of course, because I know there's a lot happening legally here, this is the jury in Manhattan that I'm referencing, looking into the former president's hush money payments to Stormy Daniels.

So as we wait for that decision, a judge handling a different case involving the former president, that classified documents probe, has now ruled that Trump's lawyer must testify, that the attorney-client privilege no longer applies here. But could the Supreme Court get involved now? We're going to watch both of those cases for you very closely throughout the morning.

BERMAN: Fed chair Jerome Powell, he has now raised interest rates to fight inflation again, but was this hike too much too soon for shaky banks to handle? The markets open in just 30 minutes. We are watching those very closely.

And a terrifying manhunt after a school shooting is now over. What police are saying about the moment they found the suspected shooter, a 17-year-old student, dead?

We begin, though, here in New York, where a grand jury will, we are reporting, reconvene today in the Trump hush money investigation as we wait to hear if the former president will be the first ever to be indicted.

HILL: So as we just set the scene again to remind you all, the Manhattan D.A., the grand jury there is weighing whether to bring key witness and former Trump attorney Michael Cohen back in for additional testimony.

CNN's Kara Scannell has been following this case for a long, long time. Kara, let's send it that way. So the grand jury is back today. Do we

know when they will have a decision on whether to bring Michael Cohen back in?

KARA SCANNELL, CNN CORRESPONDENT: Well, Erica and John, we don't know. I mean, this entire process is so secretive, taking place behind closed doors, just 23 New York citizens, but we do know that this grand jury is convening this afternoon. The last time they met was on Monday. And on Monday, they heard from a witness, a witness that the Trump side had asked the D.A.'s office to put before them. That was Bob Costello, Michael Cohen's former attorney. And prosecutors now, according to our sources, are weighing whether to bring back additional witnesses. And one of those witnesses could be Michael Cohen as a rebuttal witness.

Now Cohen had been on standby on Monday, but Costello's testimony went to the end of the day. He was not called back. But there are a lot of factors that can affect the other up play in a grand jury process. I mean, they meet on Mondays, Wednesdays, and Thursdays. They didn't meet yesterday, for instance, and we don't know the reason why that they didn't, but, you know, this grand jury also hears other cases.

So it's really unclear to try to guess what the timing is or what the process is that's taking place behind the scenes. But what does seem clear is that this is getting toward the end. A number of the witnesses that touched this campaign -- the hush money payments before the campaign. They've already been in and met with the grand jury. They've met with prosecutors. Trump was given an opportunity to go in and he chose not to.

So all the signals are that this is nearing an end. But we don't know exactly when this will be put before the grand jury if the district attorney decides he wants to move forward with an indictment -- Erica, John.

HILL: Kara Scannell, but you are on the watch so we know that as soon as we do know anything, you'll get back to us. Appreciate it. Thank you.

As we mentioned there is another major development in a different investigation involving Donald Trump. So this is the one that has to do with how classified documents were handled. Those documents found at mara Mar-a-Lago. Well, Trump's attorney is now being ordered to testify tomorrow without attorney-client privilege. That is, unless, of course, his side decides to appeal.

BERMAN: So this means that Evan Corcoran would have to testify, answer questions, and hand over documents, including handwritten and verbal notes from the case.

CNN's Katelyn Polantz following this case for us.

Do we know if the Trump team or Corcoran is going to try to appeal? Do we expect this testimony to happen tomorrow?

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: Well, John and Erica, it doesn't look like they're appealing. They're really running out of time. They would have had to get a court to put on hold this testimony and the turning over of documents, and that order from the appeals court came in yesterday and said no, Evan Corcoran needs to show up to the grand jury when the Justice Department subpoenas him which we now know is for this Friday, and that he does need to turn over documents.

There's been no response since then, so it doesn't look like they're going to be appealing. It looks like this is going forward. And this is a very hotly anticipated moment in the special counsel investigation. The special counsel has been trying to get answers out of Evan Corcoran for a long time. He was the primary defense attorney responding to this classified documents probe for Donald Trump for much of the time that they've been investigating it, telling them there may not be any more documents at Mar-a-Lago even before the FBI came in and found many, many more.

[09:05:13]

And so with this testimony teed up for Evan Corcoran, the prosecutors do believe that he will be able to say something, share some information that shows Donald Trump was trying to break the law in his conversations with the attorneys, so it really is the type of situation that could make or break the case that the special counsel's office is pursuing here. A criminal case, obstruction, mishandling of classified records.

HILL: There's also this, you know, another deadline today for another case dealing with lawsuits about the January 6th insurrection.

What's the latest there, Katelyn?

POLANTZ: Right. So this is a civil case, not a criminal case, but it's another really big case that is likely or potentially could cause a lot of heartburn for Donald Trump in court. It's one of the cases that reminds us the amount of legal peril Donald Trump still faces related to the January 6th insurrection and what his actions were this day.

This is a lawsuit where members of Congress and Capitol police officers are trying to hold him accountable, liable for what he said on January 6th. Trump has been arguing in court to an appeals court that he has absolute immunity for everything he said and did while he was president of the United States.

The Justice Department, they were the last party to speak up in this case, and they said no, he doesn't have immunity for trying to incite violence. That's not something that the Office of the Presidency done, and so he can't claim that in court. He gets to respond to that argument today, but it is before the federal appeals court in D.C. and we are going to have to wait and see what they do. It will be. It will be a very big decision when it comes down.

BERMAN: You got a lot of work ahead of you, Katelyn, I have a feeling.

HILL: Yes.

BERMAN: Katelyn Polantz, thank you so much for being with us.

We turn now to the complicated dance to tame inflation. While there are all these banking concerns going on, in just about 20 minutes, we're going to see how us markets respond this morning to Fed chair Jerome Powell's moved to raise interest rates.

HILL: CNN chief business correspondent Christine Romans with us now.

So, Christine, investors don't normally enjoy an interest rate hike. I guess it's the nice way to put it. When we look at futures, what are they telling you this morning?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: So if we can pull those up, I mean, they've stabilized here overnight. So we're watching them all morning as they trade in the premarket. As you said the stock market opens in about 23 minutes now, but investors are still I guess digesting.

You called it a delicate dance, John. I'm calling it juggling flaming chainsaws is what the Fed chief ended up doing.

HILL: OK.

BERMAN: It would be delicate?

ROMANS: Maybe, but, I mean, it's really hard here. You have a banking system that started to get creaky after these not now nine interest rate hikes in a row. When you look at the steep hill of rate hikes, it really shows you what the Fed has been trying to do. A lot of criticism that they did it too late, started too late. That is -- so look up to the right of your screen there. That is the interest rate hikes that we've had over the past year and those shaded areas on your screen, those are recessions.

So what that chart is showing you is that periods of higher interest rates tend to precede recessions. No one knows what's going to happen next, and now we have the banking drama in all of this. One thing that's interesting, I think, is the banking drama might be doing some of the work for the Fed in a disorderly way. But if you have banks that are now concerned about how much money they have if the deposits are leaving, they want to make sure that they're protecting themselves against their interest rate risk.

They might lend a little less and a little more carefully, and that can cool off the economy and be disinflationary.

BERMAN: So when interest rates go up, it does mean that it's more expensive for consumers, for us to borrow money.

ROMANS: Yes.

BERMAN: What does it mean for banks? What are the ripple effects for banks when rates go up?

ROMANS: So one of the things that's happening here is because of this contagion and fear in the banking industry, deposits are moving to bigger banks with the perceived safety bigger banks, but also people are starting to look for more yield, right? If you're getting less than 1 percent in your savings account, and you're looking around, you're like, wait a minute here. If I can get more money somewhere else, at a credit union or a certificate deposit or online bank, so you're starting to see money move around that way.

But your mortgages that would be more expensive, a new mortgage, it could mean that all these people, 85 percent of mortgages I think are like 3.5 percent are under 5 percent, those people aren't going to move. So that could mean stasis in the housing market, right? You're going to sit on that 3.5 percent mortgage. I mean, it can also mean credit cards. The average APR right now for credit card is above 20 percent for the first time in history.

HILL: Wow.

ROMANS: A store credit card is 30 percent. These are the highest Fed interest rates since 2007.

Folks. I'm just telling you, if you've got borrowed money -- John is smiling because he's heard me say this before. It's really dangerous to be sitting on borrowed money that you're not paying off every month. So be real careful about those credit card bills.

BERMAN: No, look, I've read the book. I've read, you know, "Smartest is the New Rich." I read your instructions here, and this is the exact time you need to pay attention to that credit card debt.

ROMANS: Absolutely. It really matters.

BERMAN: Bad time for credit card debts.

ROMANS: These money moves really matter. And you and I have talked about the I bonds, they're still -- there are places you can park your money right now if you have excess money for safety.

[09:10:05]

But really, this is a time for consumers to be defensive, the highest federal funds target since 2007. Nine interest rates in a row. You know, mortgage rates, ironically, could drift lower this year from where they are now, if the inflation expectations start to get better because mortgage rates have been tracking kind of inflation expectations, but I saw a really strong jobless claims number again this morning.

And all the data since the Fed last met is still strong. The underlying U.S. economy is strong. That's the problem.

HILL: Right. And that's what they're juggling.

ROMANS: Yes.

HILL: And that's also the problem I think for consumers in trying to wrap their head around the idea, why is everybody freaking out? But you tell me the economy is strong but inflation, but rates, and that's when we turn to Christine Romans make it all better.

ROMANS: They're spending little, and there's fear and sometimes fear is stronger than fundamentals.

BERMAN: F words. All right, Christine Romans, thank you very much.

HILL: Well, joining us now Ken Rogoff, professor of economics at public policy at Harvard University, former IMF chief economist.

We do have those competing F words, the fear, the fundamentals. When you look at what happened yesterday, both the decision by the Fed and then the reaction that we saw, where do you think this puts us this morning?

KEN ROGOFF, PROFESSOR OF ECONOMICS AT PUBLIC POLICY, HARVARD UNIVERSITY: Well, I think part of what the markets heard was not just that he hiked, but that they really debated it and probably are leaning towards not doing more for a while. So I think the markets weren't, you know, is unhappy with that, as you might think. And if you look at longer term interest rates, they've really fallen quite a bit on the view that as Christine said before the banking stress is doing some of the Fed's work for it.

BERMAN: You just touched on this. There was what they did, which was raised rates, you know, a quarter percent, which was more or less expected. But then there is what they said. What about what they said did you find the most interesting and most telling?

ROGOFF: Well, first, he said we waffled over deciding to do it. So that's already telling you. It was a close call. And second, he emphasized the point that credit conditions are likely to get tighter. And I think an important point is the really big drama was two weekends ago where they let a couple of big banks go under. Medium- sized banks go under, but they just cast this very wide natto for everything else.

That supported things, but then, you know, what's going to happen to lending that protect the deposit, but what about if you have a mortgage, you want to get a car loan, your business, you want to get a loan? And of course that's going to get harder. The banks know more regulations are coming. And they know people might take out some of their deposits and move them to larger banks.

HILL: So that's part of the fallout. And what was interesting in terms of those comments, right, was Powell saying that the effects, right, of credit tightening are uncertain at this point, but to Christine's point in some ways could that end up helping the situation.

ROGOFF: Well, I'd also underscore what Christine said about, it's a very messy way to tighten things because it's not the same for everyone. It's different for different banks. This is not a way you want to tighten the landing. You want to do it, you know, in a market friendly way through the interest rates or the markets may not think it's friendly but, you know, compared to having rationing and such. It's a very difficult economy to read right now because we're still coming out of the pandemic. The labor market is surprisingly strong. It's hard to understand why

it's as good as it is. But inflation still entrenched, but we have a banking crisis. It's a very tricky point to play. A couple -- a few months from now, everybody might say the Fed was so stupid, they never should have raised rates a quarter. Didn't they know the banking crisis moving out worse?

Now on the other hand, they might be saying, oh, they were so stupid. Didn't they know inflation was getting out of control? So I think he did a really good job on sort of, you know, not saying too much, but there's a lot of volatility ahead.

BERMAN: Sounds like a fun job being Fed chair. Whatever you do, there's a good chance you're wrong.

Listen, Ken, I'm old enough to remember when 2 percent was the target for inflation, and I know it's still is. They say that but it but is 2 percent still a realistic target for us inflation?

ROGOFF: Not this year, probably not next year, but I think what they're going to say is we're going to take our time. They let it get too high, but they don't want to bring it down too fast, because what we just saw the banking problems and we could well hit a recession. I think it would be a mistake to change their mind entirely.

Let's remember that Alan Greenspan who once upon a time was considered the maestro at the Fed. He was Federal Reserve chair, you know from 1987 through maybe 2004 or '05, and he -- when he inherited 4.5 percent inflation when he came in, he took seven years to bring it down. So if they take a few years, it's OK.

[09:15:15]

BERMAN: Ken Rogoff, great to speak with you. Thank you so much.

ROGOFF: Thank you.

BERMAN: A 17-year-old suspected of opening fire at a Colorado high school is found dead. What we have now learned about this teenager and an update on the conditions of two faculty members who were shot.

HILL: The CEO of TikTok heading to Capitol Hill this morning. Some lawmakers calling loudly to ban the wildly popular app. We'll take a closer look at their concerns and what it could mean for you, especially if you're a big TikToker? Plus a passenger who happened to be an off-duty pilot jumping into action when the plane's captain suffers a midflight medical emergency.

(COMMERCIAL BREAK)

[09:20:03]

HILL: Police in Colorado have confirmed that the teen who shot two people at Denver high school is now dead. His body was found late last night near his car. Authorities say 17-year-old Austin Lyle was being searched for weapons at Denver's East High School yesterday when he pulled out a gun and started shooting.

BERMAN: Two faculty members were shot. This morning one is still in critical condition.

CNN's Whitney Wild following the developments for us.

Whitney, what is known about the suspect?

WHITNEY WILD, CNN LAW ENFORCEMENT CORRESPONDENT: Well, right now we're still piecing together the details. Because he's a juvenile it's been difficult to get many details about why he was on a safety plan at the school. We are efforting more details about this suspect.

This is 17-year-old Austin Lyle. What Denver public schools and Denver police say is that he was to undergo a safety check every day at school. He had never produced a weapon until yesterday, when yesterday was so different. That's when he grabbed a firearm, shot these two faculty members around 9:15 Mountain Time yesterday, and ever since the Denver police had been on this massive manhunt for him.

And it was late last night that his car was discovered and then as you mentioned that his body was found not far from that vehicle. But the big questions moving forward are, was this safety plan enough to mitigate any threat that this student -- you know, clearly presented? And then two, how did he acquire a firearm? And then finally what is Denver public schools going to do moving forward to try to keep students and faculty safe.

What Denver public schools is prepared to do now is cancel class for the rest of the week. And then further put at least two armed police officers at East High School as well as at least one armed police officer at the rest of the high schools throughout Denver. However, in 2020, the superintendent says that armed police officers were taken out of schools. And so he sent this letter to parents last night, effectively saying, I know that this new policy is conflicting with the old policy, but he says he's willing to take that risk in the interest of public safety.

Back to you.

BERMAN: Whitney Wild, thank you so much. Keep us posted on this.

In less than an hour, the CEO of TikTok will face members of Congress as some of them push to ban the app in the United States. It has about 150 million users here.

HILL: So the concern is about TikTok's privacy and data security practices. Lawmakers are expected to hit the CEO Shou Chew with questions about the company's relationship with China, specifically with the Chinese government, with the Chinese Communist Party.

CNN's Vanessa Yurkevich following these developments here this morning.

So this testimony is key. I think some of the questions will be interesting, too, because it does sound like in a lot of ways, there are a number of lawmakers who have their minds made up at this point.

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Exactly. CEO Shou Chew try to convince lawmakers that in fact TikTok is not under the discretion of China and the Chinese government. The problem, as you said, is that many lawmakers already have their minds made up about this, and many are supporting restrictive legislation against TikTok. They are also supporting a total ban on TikTok. This is expected to be an intense hearing likely ripe for some moments on TikTok.

(BEGIN VIDEOTAPE)

YURKEVICH (voice-over): TikTok, the wildly popular social media sensation, has taken America by storm with nearly half of all Americans creating, uploading and watching videos. But now the company finds itself in the crosshairs of a political debate.

SHOU CHEW, CEO OF TIKTOK: Hi, everyone. Its Shou here. I'm the CEO of TikTok.

YURKEVICH: CEO Shou Chew announcing his arrival in D.C. on TikTok, as he gears up to face lawmakers Thursday in a high-stakes hearing amid threats from the White House to ban the app in the U.S. unless TikTok's Chinese parent company ByteDance sells their stake.

JUSTIN SHERMAN, DUKE UNIVERSITY FELLOW AND CEO, OF GLOBAL CYBER STRATEGIES: This is quite literally an existential issue for TikTok. This is life or death.

YURKEVICH: Chew will be grilled on TikTok's perceived threat to U.S. national security. Legislators have raised concerns over the Chinese government's ability to use TikTok to spy on Americans and collect their personal data. The app is already banned on federal devices and nearly half of all states have banned it on state-owned devices.

REP. MICHAEL BURGESS (R-TX): In so many instances, it just appears that China is not our friend. Now that you've got this enormously popular and powerful application that has basically captivated the minds of the next generation of Americans, what are they doing with that information?

YURKEVICH: But Chew have been insistent China has no influence over the app and its 150 million U.S. users.

CHEW: The Chinese government has actually never asked us for U.S. user data. And we've said this on the record that even if we were asked for that we will not provide that.

YURKEVICH: But top U.S. intelligence officials believe otherwise.

CHRISTOPHER WRAY, FBI DIRECTOR: This is a tool that is ultimately within the control of the Chinese government. And it to me, it screams out with national security concerns.

[09:25:07]

YURKEVICH: But there is no public evidence this is happening.

SHERMAN: The government has not provided a smoking gun. But maybe the government doesn't need to provide a smoking gun. It's about that possibility.

REP. JAMAAL BOWMAN (D-NY): Why the hysteria and the panic?

YURKEVICH: Representative Jamaal Bowman hosting TikTok creators at the Capitol just hours before the hearing.

BOWMAN: It poses about the same threat that companies like Facebook and Instagram and YouTube and Twitter pose. So let's not marginalize and target TikTok.

YURKEVICH: The Trump administration tried and failed to ban TikTok in 2020. Several courts ruled it violated the International Emergency Economic Powers Act, a law the Biden administration is also up against.

SHERMAN: Does it have any new legal authorities or powers to actually do it? No. And so this is why we come back to we're likely to get a restriction on TikTok based on what the executive branch can do right now. A complete ban, practically speaking is unlikely at this point.

(END VIDEOTAPE)

YURKEVICH: And as a way to address some of these security concerns, TikTok announced that in June of 2022, they had moved all of U.S. privacy data onto U.S. servers. But in December of last year, several ByteDance employees as part of an internal audit did access U.S. journalists' e-mails who were covering TikTok.

Now ByteDance and TikTok has said that those individuals went too far. They were not advised to do that. They were ultimately fired. And we can expect in just under an hour the CEO to probably be asked about that but he is going to say in prepared testimony that TikTok is unequivocally not an agent of China. There's going to be some fiery exchanges playing out over the next couple hours.

BERMAN: Yes. No doubt. I mean, that is going to be an area I am sure that members of Congress want to ask about. It happened once, at least once. Why won't it happen again?

HILL: Exactly. Vanessa, appreciate it. Thank you.

YURKEVICH: Thank you.

HILL: Also a quick programming note for you. Be sure to tune in to CNN Primetime tonight when Abby Phillip tapes takes a look at TikTok's future amid these calls to ban the app in the U.S. Abby hosts "Is Time Up for TikTok" tonight, right here on CNN at 9:00 p.m.

Still to come a deadly night in the Kyiv region as Russian drone strikes target Ukraine's capital. We're live.

(COMMERCIAL BREAK) [09:30:00]