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Nikki Haley in CNN Iowa Town Hall; Military Jets Scramble Due to Unresponsive Small Plane that then crashed in Virginia; Death Toll from Indian Train Crash Nears 300; Ukraine Shelling Continues in Belgorod; Russia Claims to Repel Major Ukraine Attack in Donetsk; State Media: Rescue Work Concludes After At Least 19 People Are Confirmed Dead In Sichuan Province; Tensions Spike After Encounter In Taiwan Strait; Migrants Promised Jobs, Shelter For Relocation. Aired 2-3a ET

Aired June 05, 2023 - 02:00   ET

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

[02:00:00]

(COMMERCIAL BREAK)

LAILA HARRAK, CNN ANCHOR: Hello and welcome to our viewers joining us from the United States and all around the world. I'm Laila Herrak.

Nikki Haley wants you to know that what makes her a different Republican presidential candidate than Donald Trump and Ron DeSantis. We'll have highlights from CNN's Town Hall.

New video shows just how close a Chinese warship came to a U.S. Destroyer. A live report from Hong Kong on the escalating tensions. Plus --

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A not so subtle message from Ukraine's Defense Ministry ahead of a much anticipated spring offensive.

Plus, the latest from the Russian border town already coming under fire.

UNKNOWN (voice-over): Live from CNN Center, this is "CNN Newsroom" with Laila Harrak.

HARRAK: We begin this hour with a battle to win over Republican voters in the race for the White House. Former South Carolina Governor Nikki Haley is trying to set herself apart from the Republican frontrunners. She took part in a CNN town hall Sunday night in Iowa to try to convince voters why they should choose her over former President Donald Trump, Florida Governor Ron DeSantis and others.

CNN's Jeff Zeleny has more.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN CHIEF U.S. NATIONAL AFFAIRS CORRESPONDENT: Former South Carolina Governor Nikki Haley making a generational appeal to Republican voters in Iowa on Sunday night at a CNN town hall, telling voters she's in it to win it, making clear that she's trying to elevate her candidacy in the growing field of Republican candidates.

She did so by taking direct aim at former President Donald Trump and Florida Governor Ron DeSantis, particularly on Social Security and Medicare.

NIKKI HALEY, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: I know that Trump and DeSantis have both said we're not going to deal with entitlement reform. Don't lie to them, and say, oh, we don't have to deal with entitlement reform. Yes, we do. Yes, we do. It's the reality. I'm always going to tell the truth. Is it going to hurt? Yes.

ZELENY: She sought to walk a careful line on abortion policy. She said she's unapologetically pro-life, in her words, but declined to say whether she would sign a federal abortion ban, saying it simply would not happen in this deeply divided Congress.

That could be one of her challenges as she goes forward to try and win over Republican primary voters. But she made the case that it's time for consensus.

HALEY: I don't judge anyone for being pro-choice any more than I want them to judge me for being pro-life. So what can we do with consensus? That's exactly what it is. We come through with consensus, and say, what can we all agree on? I think we can all agree on banning late- term abortions. I think we can all agree on encouraging adoptions and making sure those foster kids feel more love, not less.

ZELENY: After going through issue after issue from trade to China to Ukraine and domestic policies as well, one voter said that she has a breath of fresh air. When asked directly if she faced sexism as a woman running for president, she said she did not look at it that way. She said there's never been a line for the women's room for any job that she has applied for. But then she said, it's time for a woman to break the glass ceiling.

HALEY: I'm a big fan of women. We balance. We prioritize. We know how to get things done. I mean, honestly, we've let guys do it for a while. It might be time for a woman to get it done.

(APPLAUSE)

ZELENY: And Haley is gaining two more rivals this week when former New Jersey Governor Chris Christie and former Vice President Mike Pence also throw their hat into the ring. The field is getting incredibly crowded. There's no doubt about that. The first Republican presidential debate, in August.

Jeff Zeleny, CNN, Des Moines.

(END VIDEOTAPE)

HARRAK: Joining me now from Los Angeles is Ron Brownstein. He's a senior political analyst and a senior editor for "The Atlantic." Ron, great to have you with us. Let's start with the GOP. What's your main takeaway from the GOP in Iowa? Did any of the candidates make a convincing case, you think, of why they should lead the post-Trump GOP?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Yeah, you know, they're obviously facing unique situation. I mean, we have not had in the modern era a former president, you know, trying to come back. And he has a big piece of the party.

Ultimately, they're going to have to make a strong case to convince Republican voters to move past him. They're not there yet. I mean, that's the short answer. They're beginning to circle around themes. Ron DeSantis saying, you know, you need two terms to finish this. We have a culture of losing. I'm not sure. Nikki Haley saying we need a new generation of leaders. All of this seems to me still a little oblique and indirect.

[02:05:08]

Seventy-five percent or so of Republican voters were satisfied with the Donald Trump presidency. Over 70 percent of them think that he actually won in 2020 despite all the evidence of the contrary. You're going to need to give them a good reason to move past him. No one is quite there yet.

HARRAK: Now, it's shaping up to be quite a competitive Republican race for president with Vice President Mike Pence and Governor Chris Christie now also entering the race. Could we see a likely repeat of 2016 when Mr. Trump managed to outlast everyone or do you think that the Republicans now will coalesce around someone else more quickly?

BROWNSTEIN: Well, the dynamic is similar to 2016 but not identical. Ron DeSantis is in a stronger position as a Trump alternative, I think, than any single individual alternative was in 2016, whether it was Jeb Bush or Ted Cruz or Marco Rubio or John Kasich.

I think DeSantis has the capacity to consolidate more of the Republicans hesitant about Trump than any of those did. But he is not kind of an infinite capacity. And there is, in fact, a kind of overlap of the dynamic -- repeat of the dynamic of 2016 in this sense.

In 2016, Donald Trump won about half of the Republicans without a college degree. He only won about a third of the Republicans with a degree, but the rest of those white-collar Republicans never consolidated around a single alternative to him. That's the risk, I think, for Republicans.

Again, many of these candidates getting into the race, Nikki Haley, Chris Christie, Tim Scott, even probably DeSantis, ultimately they appeal more to the white-collar side of the party than to the blue- collar side of the party, that is Trump's strength. And so, there is the risk that there's too little competition for Trump in effect in his pool and too much competition for the pool of voters who are the most skeptical of him.

HARRAK: Now, Ron, we just closed off a roller coaster of a week. Of course, I'm talking about that battle over the debt ceiling, which is now in the rear view mirror. What has it revealed to you about American politics and especially President Biden's position?

BROWNSTEIN: Yeah. Well, first, I mean, it is extraordinary that we went as far as we did toward the brink of a domestic and global financial catastrophe, perhaps over such a modest set of policy goals. I mean, the ends and the means were so out of whack here that it really gives you the feeling that the main reason for this fight among Republicans was to show their voters that they were having this fight.

The resolution of this shows you Biden's approach to the presidency, I think, very concisely in miniature. You know, he has, at times, raised very sharp objections to Republicans, to MAGA Republicans, but, by and large, his instinct is to make the system work rather than trying to call out Republicans as a threat to it.

And here in the end, he abandoned his position, which had really been the position of Obama as well after 2011 of not negotiating over the debt ceiling, not seeming to want to reward hostage-taking to in fact negotiate a surprisingly good deal from the point of view of Democrats. Republicans didn't get a heck of a lot of what they wanted, but they got something of what they wanted. And in that sense, he did reward hostage-taking.

And so, this is -- you know, this is kind of the tightrope of the Biden presidency, trying to call out the breaking of norms, the threat to small-D democracy represented by the Trump faction within the GOP, but also trying to show that he can work with at least some of the Republicans and make the system work. He has certainly been able to reach more bipartisan deals than many people, myself included, expected, but he is presiding over an era in which you are seeing these kind of mounting threats to democracy and you have, on the Democratic side, those who wish he would be more aggressive at calling it out and less focused on trying to grease the system and keep it functioning.

HARRAK: Ron Brownstein, thank you so much.

BROWNSTEIN: Thanks for having me.

HARRAK: And CNN will host a town hall Wednesday with former U.S. Vice President Mike Pence live from Grant View University in Des Moines, Iowa. He'll take questions from CNN anchor and chief political correspondent, Dana Bash, as he prepares for his own expected presidential bid. Tune in Wednesday, June 7th at 8.00 p.m. in Des Moines. That's 9 a.m. Thursday in Hong Kong right here on CNN.

Now, police say they found no survivors from a small plane that crashed in southwest Virginia on Sunday. The search is on hold for now, but the NTSB will begin investigating the site later today.

[02:10:04]

The plane ventured near the U.S. Capitol before going down, causing enough concern that fighter jets were sent to intercept it.

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And that very sound was a sonic boom heard throughout the region caused by the F-16's scrambling overhead. Defense officials say they were unable to make contact with the plane's pilot before it crashed. We've now learned it's registered to a company in Florida, and there are reports that the company's owners lost family members in the crash.

CNN's Natasha Bertrand has more.

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NATASHA BERTRAND, CNN U.S. NATIONAL SECURITY REPORTER: A loud sonic boom that was heard across Washington, D.C. and Virginia on Sunday was caused by U.S. F-16 fighter jets that were scrambling to intercept an aircraft that traveled over Washington, D.C. and was unresponsive, according to a statement from the North American Aerospace Defense Command.

The fighter jets were called in in coordination with the FAA to try to intercept this aircraft where the pilot was not making contact with the F-16 fighter jets. Ultimately, the plane did crash in southwestern Virginia.

However, the Defense Department says that the F-16s did not actually shoot down that aircraft. Now, according to NORAD, which released the statement on Sunday, that aircraft did fly over Washington, D.C., essentially violating the airspace. And because the pilot was unresponsive, the FAA worked with the Pentagon in order to try to intercept this aircraft before it could potentially crash and cause any damage to civilians on the ground.

The civilian aircraft, according to NORAD, was intercepted at approximately 3.20 p.m. Eastern Time. And according to the Pentagon the plane crashed near the George Washington National Forest in Virginia. There were four people on board this small aircraft. However, we do not yet know the conditions of those people at this time.

Natasha Bertran, CNN, Washington.

(END VIDEOTAPE)

HARRAK: Authorities in India are working to reopen rail lines damaged in one of the country's deadliest train accidents. Crews are toiling in extreme heat to clear and repair the tracks. And they hope to have normal service restored by Wednesday.

Search operations ended Sunday. At least 275 people were killed and more than 1,000 injured. Authorities claim the train's high speed for the number of casualties. We're now also hearing more stories from survivors.

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UNKNOWN (through translator): People who were alive were shouting for help, praying to God. Rescue teams were doing their best to save people. A lot of people were crying.

(END VIDEO CLIP)

HARRAK: While some are still trying to locate loved ones, unsure if they have been killed or injured are simply unable to make contact.

(BEGIN VIDEO CLIP)

UNKNOWN (through translator): They are saying you will get to know at the hospital. I've been to all the hospitals and have found out nothing. Now, I'm going to Bhava Nishwar to find out. I just need my husband. I don't want anything else.

(END VIDEO CLIP)

HARRAK: CNN's senior international correspondent Ivan Watson is at the scene and has more on the devastation and what's next for investigators?

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IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: This is the scene of one of the deadliest railroad disasters that India has seen in its modern history. On Friday night, at least three trains, two passenger trains and a cargo train, they derailed and collided here after dark.

So what you see along the side of the tracks here is at least 20 railroad cars, like this one, which was reserved for passengers with disabilities. And you can still see the luggage, the belongings, of the many people who were on board when this terrible accident took place.

The loss of life is simply staggering. At least 275 people killed, more than a thousand people wounded, and the authorities say at least 100 of those survivors are in need of critical care. The disaster zone runs as far as I an see here with railroad cars scattered on the side of the road and hundreds of workers here in just brutal heat and humidity with heavy equipment and also doing a lot of the work here by hand with picks and shovels trying to reopen the road, as you can see here, more of the railroad cars in this in this terrible accident.

The Indian Prime Minister came to share condolences with the families of victims with the survivors to call for an investigation. The cause has been identified as a change in the electronic interlocking here and there have been vows from top government officials to bring to justice anybody who's responsible for this accident, but it highlights both the importance of the railroads for India.

[02:15:08]

More than 13 million people a day move around on trains in India but also a tragic history of accidents with more than 16,000 people killed according to government statistics in 2021 alone in railroad accidents. The authorities insist that this stretch of railroad will be reopened and operational again by Wednesday morning. A bigger question will be how to make the trains in this country and its aging infrastructure safer for future use.

Ivan Watson, CNN, in Odisha State in Eastern India.

(END VIDEOTAPE)

HARRAK: Coming up on CNN Newsroom, pro-Ukrainian-Russian dissidents step up their attacks inside Russian territory. We'll hear how Moscow is responding.

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[02:19:57]

HARRAK: Russia is trying to send a message that it's ready to wipe out Ukraine's counteroffensive before it officially begins. A Russian appointed official in occupied Zaporizhzhia claims Russian forces have repelled a Ukrainian attack in the neighboring Donetsk region. He also says Russian forces have pushed back a Ukrainian advance on the frontlines.

Ukrainian officials, however, are refusing to comment and it's difficult to assess what might be an offensive as opposed to probing moves. Well, all that happening after a weekend of deadly attacks on Ukrainian cities and inside Russian territory.

Sam Kiley brings us the latest now from eastern Ukraine.

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SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Once again, if ever there was needed proof that the Russians were continuing to target civilians, they've given it, this time with a missile strike by an Iskander missile on a residential building close to the city of Dnipro. A 2-year-old child was killed. 17 people, according to local authorities, were injured.

This just the latest of the civilian deaths that have hit this country after almost nightly missile attacks. Russian missile strikes once again renewing their calls for help from the international community with their air defenses. But similar calls are coming from authorities inside Russia in the border areas now, they say, under bombardment from Ukraine or from Ukrainian-backed Russian dissidents who split into two different groups, have attacked villages across a substantial stretch of territory now inside Russia, just across the northern border with Ukraine with the local authorities saying over the last 10 days or so at least seven civilians have been killed, four thousand have had to have been evacuated from a number of towns and villages where they've been burning buildings and a number of artillery strikes that they blame on the Ukrainians.

And the Russian dissidents have paraded a number of prisoners of war, at least to the people they claim to be prisoners of war, Russian prisoners of war, that they've offered today to exchange with the local governor if he agreed to meet them. He didn't make the rendezvous. And so, they have posted online a commitment now to hand those prisoners of war over to the Ukrainian authorities. We've got no independent way of proving whether or not these men were prisoners of war, but we do know that these Russian dissidents are very fast on the draw when it comes to social media. This is very much part of their campaign to try to spread the dissident message to try to spread ultimately some kind of revolution against Vladimir Putin. In the last few days, he has picked up that energy responding in exhorting his subordinates not to fall for the forces -- not to allow those forces to catch fire in their own country.

Sam Kiley, CNN in eastern Ukraine.

(END VIDEOTAPE)

HARRAK: Let's go now to Claire Sebastian in London. Clare, good morning. Both sides bracing for that much discussed counteroffensive. What more can you tell us?

CLARE SEBASTIAN, CNN CORRESPONDENT: Yeah, Laila. I think at this point it is fairly clear that it has to be imminent, or at least that we're very deep into what appears to be shaping or softening operations on the Ukrainian side, and that part of that is happening in the information space, the Deputy Defense Minister of Ukraine putting out over the weekend this video. Take a quick look at that.

(VIDEO PLAYING)

So, this clearly urging silence around this counteroffensive. The caption of the video is, Plans Love Silence, the beginning. We seem to mean of the counteroffensive will not be announced. The effect, though, quite the opposite, keeps us talking about the counteroffensive. It follows on from another video by the commander in chief of the Ukrainian Armed Forces just over a week ago, similarly trailer style, showing Ukrainian troops training, showcasing Western weapons.

They are allowing the suspense to build around this, presumably so that Russia does not have time to take a pause, to regroup, to retool, and they can continue to probe their defenses. Combine that, of course, with the ramp-up in incident attacks across the border, which Sam Kiley was just talking about.

And this morning as well, Russia, not to be outdone, putting out its own video, the Ministry of Defense, of what it says is a foiled Ukrainian large-scale offensive in the southern Donetsk region, which it says it was able to destroy a large amount of Ukrainian equipment and troops. We have not been able to verify that.

The Ukrainian side is not admitting to it. And in fact, this morning the communication directorate of the Ukrainian Armed Forces warning that Russia is intensifying information operations, including about the counteroffensive. So the information space is very important here. But overall, President Zelenskyy over the weekend saying in an interview with the Wall Street Journal that they are basically ready, even without, he says, the addition of F-16 fighter jets, Laila.

[02:25:07] HARRAK: Clare Sebastian reporting. Thank you as always.

Sunday was Russian political dissident Alexei Navalny's 47th birthday. Human rights activists say at least 90 of his supporters were detained by police after they took to the streets to call for his release from prison.

Video shows a woman who was detained in a Moscow square for walking with a balloon that reads Happy Birthday. There are no estimates of how many people participated nationwide and seen and cannot independently verify claims of the numbers detained or their status. Mr. Navalny is serving a nine-year sentence in a maximum security prison outside of Moscow. He's about to go on trial again on extremism charges, which could result in a in a 35-year prison sentence.

NATO Secretary General Jens Stoltenberg says Sweden has fulfilled its obligations for admission to the alliance. Stoltenberg was in Istanbul on Sunday meeting with recently re-elected Turkish President Recep Tayyip Erdogan. Turkey has blocked Sweden's accession to NATO mainly because it accuses Stockholm of housing, quote, "terrorist organizations." Swedish, Turkish and Finnish officials will meet next week to discuss Sweden's membership bid.

Meanwhile, hundreds of demonstrators in Stockholm protested that new terrorism legislation that Stoltenberg mentioned. The government hopes the law will help overcome Turkey's objections to Sweden joining the alliance.

Up next, U.S.-China tensions spike after a near collision at sea in the Taiwan Strait. A live report on the latest just ahead.

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[02:30:17]

LAILA HARRAK, CNN INTERNATIONAL ANCHOR: At least 19 people have been confirmed dead after a massive landslide in China. It happened in Sichuan province early on Sunday morning. A Chinese broadcaster says part of a mountain collapsed near a state-owned forestry station. The wall of mud and rock crashed into workers' quarters at a mining facility. State media says the rescue phase of the operation is over and the investigation is underway.

A close naval encounter in the Taiwan Strait is ratcheting up tensions and rhetoric between the U.S. and China. That moment coming over the weekend when the U.S. said a Chinese military ship sailed in front of a Navy destroyer causing the U.S. vessel to slow down to avoid a collision. CNN's Kristie Lu Stout is following developments and joins us now live from Hong Kong with the very latest. A very close call, Kristie.

While the U.S. and China were locking horns at a security conference in Singapore. There was that near collision at sea. Tell us more.

KRISTIE LU STOUT, CNN CORRESPONDENT: Yes, it was interesting. Over the weekend, U.S.-China friction was on full display in two places in Singapore, Asia's largest Defense and Security Forum and in the Taiwan Strait. Now on Saturday, we had warships from China and the U.S. that were involved in a near collision. And now we have -- new video was released earlier today of this close encounter.

So, this is what happened here. Let's take a look at this video. The U.S. and Canada, they were staging a "routine transit" through the Taiwan Strait. When you see that vessel straight ahead, a Chinese ship cut in front of the U.S. warship. The U.S. military says that the Chinese vessel came within only 150 yards. That's about 137 meters of the U.S. ship in a "unsafe manner." And that forced the U.S. ship to slow down to avoid a full-on collision.

Now, hours after this happened in the Taiwan Strait. Meanwhile, in Singapore, China's Defense Chief Li Shangfu accused the United States of creating chaos in the region. He was speaking as Singapore's security forum, the Shangri-La forum, he said this, "They are not here for innocent passage. They are here for provocation."

Now, Li, the Chinese defense chief also said in his speech in Singapore that the U.S. and China should see common ground and common interests. But keep in mind that China earlier rejected an offer from the Pentagon Chief Lloyd Austin to meet face to face at the summit formally setting sanctions on Chinese individuals and companies. Austin, he expressed deep concern about this lack of high-level military communication between these two powers when he gave a speech at the Singapore summit on Saturday and springing up the statement for you.

This is what Lloyd Austin said. The U.S. Defense Secretary saying "For responsible leaders the right time to talk is any time, the right time to talk is every time, the right time to talk is now." U.S.-China relationship is at a very low point. The lowest point in decades. The two are at loggerheads over a slate of issues from trade to Taiwan to access to sensitive technology to territorial issues, but some engagement is happening.

In fact, on Friday U.S. official told CNN that the CIA director secretly traveled to China last month to help reset relations and also keep in mind that handshake that took place, you know, dinner Friday night in Singapore, Secretary Austin shook hands with his Chinese counterpart but that was it. It was only a handshake without high- level military talks. That single gesture is not enough to cool the tension. Laila.

HARRAK: All right. Kristie Lu Stout reporting. Thank you so much.

STOUT: You got it.

HARRAK: Just ahead. A private plane dropped off more than a dozen South American migrants in California on Friday. Now, state officials are investigating how they got there and if any laws were broken.

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[02:37:26] HARRAK: The prime suspect in the disappearance of American teenager Natalee Holloway will be temporarily transferred to U.S. custody this week.

Peruvian officials tell CNN they will hand over Joran van der Sloot to Interpol on Thursday, which in turn will deliver him to American authorities. Van der Sloot is set to stand trial in the U.S. on extortion and fraud charges for allegedly trying to extort Holloway's family after she disappeared. She was last seen alive with van der Sloot and two other men 18 years ago, leaving a nightclub in Aruba.

California says 60 migrants from Colombia, Venezuela were flown to the state capitol on a private jet and dropped off at a church without prior warning. They were allegedly lured there with promises of jobs, clothing and shelter. Well now, California officials are investigating who transported them and whether any laws were broken. CNN's Camila Bernal has the story.

CAMILA BERNAL, CNN NATIONAL CORRESPONDENT: Officials here in California say they will get to the bottom of this. It's now an ongoing investigation. Both the governor and the Attorney General here in California say they met with these migrants that according to the nonprofit group that's taking care of them says is 16 people from Venezuela and Colombia all in their 20s and 30s.

Now, in terms of their journey, we know they were in Texas, and they were taken to New Mexico. And in New Mexico, they boarded this private jet that brought them to Sacramento, California. Once they were here in the state of California, they were dropped off outside of the offices of the Diocese of Sacramento and according to officials here, there is going to be an investigation into all of this.

And of course, the documentation that these migrants have. According to the Attorney General in a statement he released. This is what he's saying about that documentation. He says, we can confirm these individuals were in possession of documentation purporting to be from the government of the state of Florida. That statement then goes on to say, state-sanctioned kidnapping is not a public policy choice. It is immoral and disgusting.

Now the Attorney General is looking at potential criminal and civil options here for the people that either arrange the transport or transported these migrants. He's also saying he's looking into who paid for all of this and whether or not these migrants were given false promises or misled into coming here to California. Now, there is a faith-based nonprofit organization that is currently taking in care of these migrants.

[02:40:01]

They say they will continue to support them in whatever they need and also say these migrants had no idea where they were or where they were going. But they also have questions in terms of how they got here and what happens next with their legal process. Here is a representative from that nonprofit group.

(BEGIN VIDEO CLIP)

SHIREEN MILES, SACRAMENTO ACT SPOKESWOMAN: Well, we are happy to receive them and welcome them and want to give them whatever support they need. They will be in trouble if they don't show up at the court hearing this been scheduled for them.

(END VIDEO CLIP)

BERNAL: Of course, there's a lot of questions as to what happened here in California and who sent these migrants to California but officials here, saying they will investigate while also treating these migrants with dignity and respect.

Camila Bernal, CNN, Los Angeles.

HARRAK: CNN has reached out to state officials from Texas and Florida for comments.

Prince Harry is expected in London's High Court early this week as he sues a British tabloid. The trial resumes Monday in his lawsuit against the publisher of The Daily Mirror. Prince Harry is one of more than 100 high-profile people suing Mirror Group Newspapers. His lawsuit accuses MGN of unlawful activities, including phone hacking to obtain private information. MGN is contesting most of the claims, although it apologized for one instance and agreed that Harry is entitled to compensation.

Thanks so much for joining us. I'm Laila Harrak. For our international viewers, World Sports is up next. For our viewers here in the United States and Canada, I'll be back with more CNN NEWSROOM after this short break.

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[02:45:35]

HARRAK: With Saudi Arabia vowing to slash oil production, the White House says it's mainly focused on prices for U.S. consumers. Saudi says it's cutting output by another one million barrels a day starting next month in order to boost prices. But U.S. officials say they simply want to ensure supply meets demand so that gasoline prices stay low. They've dropped significantly over the last year largely because oil prices have come down.

Well, the price of Brent crude. The world's benchmark has nearly been cut in half since early last year. The U.S. debt ceiling crisis now memory. Economists and investors trying to figure out where the U.S. economy goes from here.

Well, the Dow posted its biggest single-day gain of the year, Friday, up more than two percent. Investors cheered the debt ceiling deal and a favorable jobs report. But more moderate thinking appears to be taking over now with U.S. stock futures for Monday barely moving. It's not clear if inflation is tamed quite yet. And with no two-key inflation indicators due out in mid-June just as the Fed decides on its next interest rate move. Money managers may be poised to take a cautious approach.

Joining me now from Los Angeles is Ryan Patel. He is a senior fellow at the Drucker School of Management of Claremont Graduate University. So, good to have you with us, Ryan. The debt ceiling fight seems to have been resolved. This is now mean that the government gets a clean slate. Are things stable now, how have markets reacted?

RYAN PATEL, SENIOR FELLOW, DRUCKER SCHOOL OF MANAGEMENT OF CLAREMONT GRADUATE UNIVERSITY: Well, it's never that easy. I think the markets have reacted accordingly that they felt that this was going to occur. But it has been a roller coaster year and we're halfway throughout the year. And I believe we're still going to see the world poster down the road in the next six months.

So, I think that this is one step that's gone great. But then guess what, now we're going to be talking about inflation. We're going to be talking about the Fed meeting which is coming up in a couple of weeks in June. And how is that going to play out? So yes, the markets haven't really came back to saying, hey, everything's great, because there's some uncertainty still ahead. But we did pass one test. But we're not out of the waters yet.

HARRAK: Not out of the waters yet. Let's talk inflation, you mentioned -- you mentioned it there. What's the situation we are facing right now with this, you know, all of this mean for attempts that are being made to defeat inflation?

PATEL: Well, let's just be very honest, I'm going to be very honest here. We're not out of the woods even close when it comes to knowing that we've dealt with inflation. Now, are we in the same situation we were six months ago? No, but we're not in the situation where we thought we were going to be where we're going to start decreasing the interest rate and have a better control.

Yes, we saw last month the unemployment rate here in the U.S. it dropped from three point, you know, from being -- from -- well, increased 3.4, 3.7, we saw a slowing hourly wage growth. But we did see in the last Wednesday report from the Labor Department uncertain numbers that, you know, the increase of job openings. So that obviously puts a wrench into the Fed, which then goes 10 times in a row, we've seen the increase in the rate.

So, in June when it comes up, I believe the Fed should freeze or pause the interest rate to get more data to see what they're going to do in July. And that would be the best-case scenario.

HARRAK: And what if the Fed doesn't do that during its next meeting?

PATEL: Well, that means it's going to increase it. And it's going to be the 11th time in a row, it'll cause I think some market to -- I don't want to say react, but we're going to see when is it going to be enough? And I think the Fed, if they're going to increase it, maybe it's by 25 basis points or 50. They have to really give the reason on what that aspect is. And I think the Fed here really needs to decide what their long-term strategy is going to be since then -- we haven't seen the numbers go the way they want to. So obviously, that's why I think the pause would be better. So they can kind of read gather and have a better plan for the second half of the year. But if they believe that numbers are getting -- going in the wrong direction, then they're going to be aggressive which they've continued to say that they're going to be.

HARRAK: Let's talk more about in terms of where numbers are going when it comes to jobs. There has been some encouraging news on the job's front. What's your read?

PATEL: Yes. I mean, it's encouraging but not encouraging enough because that hasn't made any decision for either or any -- you think about the business community as a whole.

[02:50:04]

We did say cuts in the first half of the year, but businesses have still -- have been not aggressive in their growth. They've kind of sitting on the sidelines. And you've kind of see that in IPOs, not to make that correlation. But we've seen less IPOs going into because there's this un-shakiness of where we're going to go. And until you have that credibility, that stability and that certainty, that stability is going to come back for businesses to kind of come back and be more aggressive.

Otherwise, we're going to see flat growth for the rest of the year which the U.S. is in GDP growth is seeing that and what the Fed with consumers want and businesses want is to be more aggressive and back to that growth number. But until we see more better data that is more consistent, that will give that confidence that what others are looking for.

HARRAK: What debate needs to be had right now in -- is this current situation actually sustainable? Do you think that lawmakers that it's high time to have that very serious discussion about public debt?

PATEL: Yes. I think you have to start it now. You can't wait until the end. We saw that in the debt ceiling. The past week, we're talking about pushing it out in two years. And that's what they did. They agreed to push it out there, you know, another two years to deal with the situation. But you can't wait 18 months from now to continue that conversation. I think all sides need to come together, starting right now, not waiting six months.

And start to put a plan together to ensure that all parties and we're putting the economy in a place that the citizens are doing well too. So, I would say it's not over. This is just beginning to have this conversation and having control of the debt ceiling and having control the debt and making sure imports and exports are going to be something that puts the U.S. economy in a more stability future has to happen now.

HARRAK: Ryan Patel, thank you so much for your insights. Thank you.

PATEL: Thank you. HARRAK: Hollywood directors have reached a tentative deal with movie and television studios on wages, work hours, the use of A.I. and more while the writers' strike continues. CNN's Chloe Melas has the -- has the details rather.

CHLOE MELAS, CNN ENTERTAINMENT REPORTER: The DGA is calling this a "truly historic deal." But what's in that deal? Well, I'm going to break that down for you. There are 19,000 Directors Guild members and they wanted more money. They wanted artificial intelligence and streaming concerns to be addressed and it looks like they got that. So, there's going to be a five percent wage increase in the first year.

Assistant directors are going to see their workdays cut by an hour. We had been hearing that many members in multiple guilds feel not only overworked and underpaid, something that is interesting is that in the contract, it also bans live ammunition on the set. This is coming a little over a year after what happened on the set of Russ where cinematographer Halyna Hutchins being killed by a live round of ammunition that somehow got its way onto set.

And in that prop time that actor Alec Baldwin was holding. When it comes to artificial intelligence, the agreement would also put in to writing a clause about the use of A.I. stating, "A.I. is not a person and that generative A.I. cannot replace the duties performed by members." And for the first time, global streaming video on demand residuals would be paid on the number of international subscribers.

So, this results in a 76 percent increase in foreign residuals for the biggest services. So, this is tentative. This is going to be submitted to the guild's national board in a meeting on Tuesday. But again, we still have the Writers on strike. We still have SAG that's currently figuring out their own deal. And this is important because the content that we all watch and we consume, this is a -- this means we need directors, we need writers, we need actors to do that.

So, the Writers Guild has come out and said that they support their friends in the DGA, but that they are still holding out for their own deal and for their own agreement on wages and residuals and concerns with A.I. So, we'll see. You know, I've had writers tell me that they think the writers strike could go through the summer. Back to you.

HARRAK: In just a few hours, NASA and SpaceX are set to launch a resupply mission to the International Space Station. It'll carry food, science equipment and new energy producing solar panels for the ISS group. And that will follow another successful launch on Sunday.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: And liftoff (INAUDIBLE) Go Starlink, go Falcon.

HARRAK: SpaceX there launching its Falcon 9 rocket from Florida carrying 22 miniature Starlink satellites. Well, that launch marked the third flight for this reusable Falcon booster and there it is going back down and sticking a landing. In the Game 2 of the NBA Finals, the Miami Heat withstood a 41-point onslaught from Denver's Nikola Jokic as they defeated the Nuggets 111 to 108 on Sunday and tied the series at one game each.

[02:55:13]

Well, Miami got off to a hot start, but Denver came back with a 45 to 14 run. In the second quarter to take control of the game. Miami answered with a late run of its own to regain the lead in the fourth.

(INAUDIBLE) Jamal Murray had a chance to tie the game and missed a three pointer in the final seconds. And with that, the Heat came away with a win the series. Moves to Miami for Game 3, which is scheduled for Wednesday.

Now, a 20-year-old golf phenomenon, Rose Zhang continues to make history, becoming the first player to win an LPGA Tournament in her professional debut in 72 years. Following a stellar career at Stanford Zhang has been a profile barely a week but she's now the first ever to win a collegiate individual at national title and a professional tournament in the same season. Zhang finished at nine under par for that tournament.

And finally, a chance encounter at the airport between Manchester City for years and legendary singer Elton John.

(BEGIN VIDEO CLIP)

MANCHESTER CITY PLAYERS: I hope you don't mind. I hope you don't mind that I put down in the words, how wonderful life is while you're in the world.

HARRAK: Well, the team serenaded him with a rendition of his hit Your Song. While the singer also hugged the players, posed for selfies with some of them. It happened shortly after the team won the FA Cup. They defeated their bitter rival Manchester United 2-1 on Saturday. They will now play in the Champions League final this weekend hoping to win a historic treble. Great stuff.

Thank you so much for your company. I'm Laila Harrack. I'll be back with more CNN NEWSROOM after this short break. See you in a bit.

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