Return to Transcripts main page

CNN Newsroom

Harris Campaign to Announce VP Pick in Coming Hours; Investors Worry Fed too Slow to Cut Interest Rates; Japan Nikkei Rebounds After Monday Sell-Off; Historic Rainfall, Flooding Expected Across Southeastern U.S.; Pentagon: Iran-Aligned Militia Groups Behind Attack in Iraq. Aired 4-4:30a ET

Aired August 06, 2024 - 04:00   ET

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

[04:00:00]

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Hours away from making one of the biggest decisions of her young presidential candidacy. She'll be appearing with that candidate on Tuesday night in Philadelphia.

UNIDENTIFIED MALE: Don't go out into this storm.

UNIDENTIFIED MALE: Please be safe and stay off the roads. If you are sheltering at home, do not leave at this point in time. Just stay where you're at.

KEIR STARMER, BRITISH PRIME MINISTER: We've seen Muslim communities targeted. Nazi salutes in the street. Attacks on the police. I won't shy away from calling it what it is. Far-right thuggery.

(END VIDEO CLIP)

ANNOUNCER: Live from London, this is CNN NEWSROOM with Max Foster and Christina Macfarlane.

MAX FOSTER, CNN ANCHOR: Hello, warm welcome to our viewers joining us from the U.S. and around the world. I'm Max Foster.

CHRISTINA MACFARLANE, CNN ANCHOR: And I'm Christina Macfarlane. It's Tuesday, August 6th, 9 a.m. here in London, 4 a.m. in Philadelphia, where in the hours ahead, Democratic presidential nominee Kamala Harris is set to appear for the first time with her choice for a running mate. The official announcement of her VP pick is set to come ahead of that Pennsylvania rally.

FOSTER: I feel like she's shouting at me over my shoulder.

Multiple sources tell CNN Harris focused on two Democratic governors in the final hours of her search. Josh Shapiro of Pennsylvania and Tim Walz of Minnesota.

Pennsylvania, just the first stop for the Harris campaign this week. The team is set to travel to a number of battleground states, including Michigan, North Carolina and Nevada.

MACFARLANE: Now Harris is looking to gain support across the country as the CNN Poll of Polls, which includes recent national polling, finds a close race with no clear leader. And as the focus remains on the future of the Democratic ticket, former House Speaker Nancy Pelosi was asked about President Joe Biden and their relationship since he left office -- left the race.

(BEGIN VIDEO CLIP)

DANA BASH, CNN ANCHOR: Have you spoken to President Biden since he dropped out?

REP. NANCY PELOSI (D-CA): No, I have not. Do you hope to?

PELOSI: Yes, I hope to. Yes, we're all busy.

BASH: Is everything OK with your relationship?

PELOSI: You'd have to ask him, but I hope so.

(END VIDEO CLIP)

MACFARLANE: Nancy Pelosi also weighed in on Kamala Harris's VP search, saying she'll back whoever the vice president ultimately chooses. CNN's Jeff Zeleny has more now from Washington.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN CHIEF U.S. NATIONAL AFFAIRS CORRESPONDENT: Vice President Kamala Harris only hours away from making one of the biggest decisions of her young presidential candidacy. That, of course, is who will join her on the Democratic ticket. She'll be appearing with that candidate on Tuesday night in Philadelphia.

The campaign is intentionally keeping a close hold on this, trying to build anticipation, build momentum for this announcement. We do know that some of the leading contenders are Minnesota Governor Tim Walz, who met with Harris on Sunday at her residence at the Naval Observatory in Washington. I'm told the two had a very spirited, kind, friendly conversation.

Chemistry is at the root of her decision here, as well as sharing her core values. I'm also told that Pennsylvania Governor Josh Shapiro also met with Harris on Sunday for the final stages of the interview here.

Now, of course, she has campaigned with all of these Democratic contenders as she's been a vice president traveling across the country. But it's an entirely new moment, an entirely new conversation, as she is trying to pick someone to work with her, not only for the rest of this campaign, but for her administration, should she win.

We also know that Arizona Senator Mark Kelly, also in the list of final contenders, he, too, met with Harris on Sunday. Now, she's been meeting with her advisors, going through last bit of

vetting and other information, trying to make sure that there is no harm that her running mate can do.

Now, it's an open question how much actually a running mate, a vice presidential candidate, can help the top of the ticket. Of course, Shapiro from Pennsylvania, that is a key electoral state, 19 electoral votes, and he's very popular in that state.

Tim Walz is from Minnesota. It's not one of the top battlegrounds, but it is competitive in some respects. And it's right next door to Wisconsin, so he is seen as someone who could help in the Midwest.

Mark Kelly, of course, from Arizona, that is indeed a battleground state that Joe Biden won in 2020, Donald Trump won in 2016.

Taken together, though, as the vice president makes this big decision for who her running mate is, I'm told she's looking for chemistry, looking for competence and core values, someone who shares her governing philosophy.

[04:05:04]

But, of course, that only matters if they win. So they are also looking for the strongest and core values, someone who shares her governing philosophy.

But, of course, that only matters if they win. So they are also looking for the strongest potential candidate. We will see if the news leaks out early.

They are planning to announce it on Tuesday morning by video and then appearing together Tuesday night for the first time in Philadelphia before setting off on a tour of battleground states.

Jeff Zeleny, CNN, Washington.

(END VIDEOTAPE)

FOSTER: It's a very different day, isn't it, today on the financial markets. In the U.S., they're on track for a positive start when trading gets underway later today. The Dow, the Nasdaq, the S&P 500 hoping to recover from their worst percentage drop in nearly two years. U.S. futures moving higher overnight.

MACFARLANE: It was that jobs report, wasn't it, the renewed fears of a recession and the lack of an interest rate cut by the Federal Reserve all contributed to Monday's sell-off. In Asia, though, Japan's Nikkei has bounced back from its worst one-day percentage drop since 1989. In quite dramatic fashion, the index gained more than 10 percent after falling 12 percent on Monday.

Some analysts say over-excitement about artificial intelligence has contributed to the sell-off in top stocks.

FOSTER: Tech stocks. MACFARLANE: Tech stocks.

FOSTER: CNN's Richard Quest explains what else is behind the drop.

(BEGIN VIDEOTAPE)

RICHARD QUEST, CNN ANCHOR, QUEST MEANS BUSINESS: They are worried that the Fed is behind the curve, has left it too late to cut interest rates and therefore is pushing the U.S. economy to slow down to the point of recession. And this is to be expected. This was entirely predictable.

Bearing in mind we had 11 increases in interest rates in barely two years, a phenomenal amount of tightening. It crushed inflation exactly as it was supposed to. But then, of course, you've got the other side. Eventually, unemployment starts to rise.

Now the academic question, in a sense, we won't know until a few more months. Has the Fed left it too late?

The consensus is probably yes.

(END VIDEOTAPE)

FOSTER: Let's go to Tokyo. CNN's Hanako Montgomery is there because this is where it all started yesterday. An extraordinary story today. A big bounce back of those losses yesterday. But is the concern over?

HANAKO MONTGOMERY, CNN CORRESPONDENT: Hi, Max. The concern is slightly over just for now. But there are, of course, worries that markets will continue to be volatile in the coming months until really September when the U.S. Federal Reserve is expected to cut rates.

Now, the reason why we've seen Asia's stock markets and specifically the Japanese stock market, which, of course, was the hardest hit yesterday, recover so quickly is really twofold. The first is we received better-than-expected service sector data for the month of July from the United States. Now, that sees some concerns about the possibility of a recession in the world's largest economy.

And the second reason is the yen looks as though it's beginning to stabilize, and the value of the yen has dipped a little bit. Yesterday, we saw the yen surge against the greenback. And this massive movement we've seen in the dollar-yen rate was really alarming to hedge funds and to investors, but it's largely attributed to the fact that the Bank of Japan raised interest rates for the second time in 14 years just last week.

Interest rates are now at 0.25 percent, which doesn't sound that high. But the reason why Japan is raising interest rates, a break from what other countries around the world is doing, is because it looks to raise, again, interest rates and then prop up the value of the currency. Japan has seen the value of the yen drop against the greenback in the last year or so, and that's really raised the prices for some imports, for food and fuel, for example. And now Japan, again, looks to raise interest rates and then prop up the value of the currency, and it's done exactly that.

But the sudden movements we saw on Monday really spooked investors and hedge funds, which is why we saw the really sudden selling spree. But as Japan looks to stabilize its currency, and again, the value of the yen has dipped a little bit, some of these nerves, some of those have eased a little bit, and they've been soothed.

But, of course, we aren't out of the woods just yet. Experts are warning that the central banks around the world will be looking to see what the Federal Reserve will do in the coming months, again, in September -- Max.

FOSTER: Hanako, thank you very much indeed. We'll be watching closely as the week goes on.

Large parts of southeastern United States, meanwhile, including Florida, Georgia and South Carolina, are facing torrential rain and catastrophic flooding from Tropical Storm Debby.

MACFARLANE: At least two tornadoes have been confirmed in South Carolina, with more severe weather alerts in effect across the region. The threat of flooding extends as far north as New York. The mayor of Savannah, Georgia, says he's terrified by the amount of rain from this slow-moving storm, which has blamed for at least five deaths so far.

[04:10:03]

FOSTER: CNN's Isabel Rosales is in Savannah.

(BEGIN VIDEOTAPE)

ROSALES (voice-over): Pounding rain. Whipping wind. Powerful currents.

UNIDENTIFIED MALE: The water hasn't quite made it up to the bottom of our unit.

ROSALES (voice-over): Tropical Storm Debby, no longer a hurricane after making landfall as a Category 1 storm. The Big Bend of Florida seeing first impact.

RON DESANTIS, (R) FLORIDA GOVERNOR: We have seen significant storm surge. We have seen inundation. We have seen and will continue to see flooding in varied parts of the state of Florida.

ROSALES (voice-over): But Debby is still bringing life-threatening storm surges and rain as it crawls inland. More than a month's worth of rain has already fallen in Florida, triggering at least 10 flash flood warnings. Hundreds of Sarasota residents were transported from flooded homes by water rescue teams.

DESANTIS: There's going to be a lot of water that's going to be dumped throughout the state, and we're going to see effects of that not just today but in the ensuing days.

ROSALES (voice-over): Though rain will likely be Debby's biggest danger, strong winds and potential tornadoes will continue to be a threat. Four storm-related deaths now confirmed in Florida. A teen crushed by a tree that fell on his mobile home and multiple driving fatalities, including a tractor-trailer driver who lost control on a wet roadway near Tampa, plunging off a bridge and into a canal. The second death blamed on Debby's severe weather conditions.

The storm did wash up one rather unusual find, $1 million worth of cocaine near the Florida Keys, according to the U.S. Customs and Border Protection.

JAY MELDER, SAVANNAH, GEORGIA CITY MANAGER: This is a once-in-a- thousand-year potential rainfall event.

ROSALES (voice-over): Debby is slowing down in speed, and officials are expressing concern over the amount of rain forecast as it continues into Georgia and South Carolina. In Savannah, emergency crews are already receiving their first call for a water rescue.

WILLIAM HANDY, DEPUTY CHIEF, SAVANNAH FIRE DEPARTMENT: You just saw one of our marine units, our water rescue teams, roll out to a vehicle stalled with people trapped in the vehicle.

ROSALES (voice-over): After preparing for the impact of 20 inches of rain in just two to three days.

HANDY: There's been a lot of behind-the-scenes prep work, working with the city as a whole, with them clearing out the obstructions of drains, working with the city to make sure we have sand for the residents.

UNIDENTIFIED FEMALE: We flood so easily here.

ROSALES (voice-over): Residents in Savannah heeding the warnings and bracing for unprecedented flooding. Multiple sandbag stations ran out of supplies Sunday night and were resupplied by the county.

ADRIAN HILL, SAVANNAH, GEORGIA RESIDENT: The storm sitting on top of us for 24 to 48 hours. And I know that's just going to be a lot of precipitation, a lot of rain coming down. It's just going to be unheard of, really.

ROSALES: The concerns here for Savannah are historic rainfall, the potential for tornadoes and coastal flooding. So if the forecasts verify in terms of all of that expected rainfall, well, all of that water has to make its way from the west through the Savannah waterway. So the big question here is, does the river have enough capacity for all of that water to get out?

If not, that's a big problem. That means serious flooding. So the moral of the story here is that this is not a one-day event, especially with Debby just stalling and going at a crawl here. This is not a sprint. It is a marathon.

Isabel Rosales, CNN, Savannah, Georgia.

(END VIDEOTAPE) MACFARLANE: Now CNN meteorologist Derek Van Dam joins us now. And as we heard there, Derek, the storm is stalling. It's slowing down. But, of course, not over yet.

DEREK VAN DAM, CNN METEOROLOGIST: Yes, Christina, I think that when we look at this storm maybe a week from now, the major story is still yet to be written. More than likely going to be the flooding that will occur from this storm. And you heard Isabel talk about it.

It's really the southeastern U.S., particularly the coastal areas of Georgia and into South Carolina that we're concerned about. Here's what it looked like on Tybee Island, Georgia, just off the coastline of the state of Georgia. And here's a look at the latest radar.

You can still see that counterclockwise spin. That's what's left over of Debby. And so that low pressure, the actual center of the storm, has not moved offshore just yet, but it is anticipated to do so.

And I want you to notice what it's doing. It's starting to track in some of these what we call tropical feeder bands over the same locations, one after another after another. And this is that extended duration rain event that we are fearing will pile up the numbers.

In fact, we're already seeing that. We noticed it when it crawled ashore across the western coastline of Florida into the Big Bend. You can see rainfall totals here over a foot.

But notice that shading of white and pink here into Georgia and South Carolina as well. And this storm is nowhere near done. Now, we already broke 24-hour daily record totals for some locations.

Gainesville Airport, regional airports here, Jacksonville International Airport, even North Charleston, seeing a daily record rainfall total as well.

Forty-five mile per hour winds doesn't look that impressive on satellite, but believe me, this has got a lot of moisture associated with it.

[04:15:02]

And once it does eject off the Atlantic seaboard, it will re-intensify and help reorganize some of those feeder bands we showed you on the radar just a moment.

And then I want to point this out, how slowly it's moving from Wednesday into Friday. Not much distance here. And then it's got a track that could bring it up the East Coast. And all of that moisture you see in the southeast will potentially impact the mid-Atlantic and New England as well.

There's a tornado threat. Tornado watches through this morning for Charleston and the greater Savannah region. So keep that in mind, a brief spin-up tornado, not out of the question. And, again, the rain will pile up through the course of the day today. That's why we have flash flood warnings. This is working in conjunction with the surge that is pushing in from

the Atlantic Ocean as well. The rainfall totals here across the southeast will pile up over a foot.

But as we extend this forecast out through Saturday, look at the rainfall anticipated across the nation's capital into New York City as well as Boston. Again, that's for the second half of the week. So the more immediate threat here, of course, the high-level risk. That's a level four of four for Charleston and Savannah today. Guys, back to you.

FOSTER: Derek, thank you so much indeed for that.

Now, on the U.S. west coast, residents of east Los Angeles are being forced to flee their homes as a wildfire spreads rapidly. The Edgehill Fire started on Monday, and so far it's spread to the size of about 76 American football fields.

MACFARLANE: Hundreds of firefighters leapt into action from multiple organizations to battle the blaze and are working through the night. CalFire reports the Edgehill Fire is at 75 percent containment right now.

FOSTER: Now ahead, a surprise strike in Iraq and fears of a wider regional conflict as the world waits for Iran to retaliate against Israel.

MACFARLANE: Plus, hundreds are arrested as violent far-right protests sweep the U.K. and new Prime Minister Keir Starmer is vowing to end the riots.

FOSTER: Later, Team USA's Simone Biles misses out on gold in her last event at the Paris Games, but she has no problem with who took that top spot.

(COMMERCIAL BREAK)

FOSTER: The U.S. President and Vice President were in the White House Situation Room on Monday for a briefing on a strike that injured several U.S. personnel at an air base in Iraq.

MACFARLANE: The Pentagon says Iran-aligned militias are behind the attack. The U.S. Defense Department is calling the suspected rocket strike a dangerous escalation.

FOSTER: Damage assessments underway at Iraq's Al-Assad Air Base. This comes as the Middle East braces for Iran to retaliate against Israel.

MACFARLANE: Intense diplomacy is underway to prevent an attack that could lead to a wider war. It's unclear how and when Iran will go after Israel, but the Iranian Foreign Ministry is stressing that Tehran is determined to, quote, deter Israel, and no one should doubt its resolve.

FOSTER: Iran has been vowing to punish Israel for days now after its ally Hamas political chief Ismail Haniyeh was assassinated on Iranian soil last week. Israel hasn't claimed responsibility for the killing.

Paula is with us here in London currently. And how does this attack in Iran feed into this wider debate?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, what we've seen --

FOSTER: Iraq, rather, sorry.

HANCOCKS: Yes, what we've seen overnight, Max, is the Iranian-aligned militias, is the way that the U.S. puts it. They have attacked a U.S. base in Iraq where U.S. troops have been injured. Now, this is significant because it hasn't really happened for many months.

We saw, between October and the end of January, more than 150 attacks against these U.S. troops. It was continuous. But then it really did calm down after three U.S. troops were killed. And we haven't really been seeing much of this until now.

So, of course, the timing is significant. This is what the U.S. president, the vice president were talking about in the Situation Room, the fact that we are waiting for this Iranian retaliation to the killing of Ismail Haniyeh, and then you see this attack on U.S. troops.

And this is the assumption that it may not just be Iran attacking Israel, conventional state-on-state. You are going to see the Iranian proxies getting involved, and potentially this is the first strike of what we've seen overnight.

FOSTER: In terms of, you know, the preparations for any wider war, can people read into this that there's going to be attacks on Americans as representatives, in a way, for many in the Middle East of Israel?

HANCOCKS: I mean, at this point, anything is possible. The U.S. doesn't know what is going to happen, and we've heard that from two U.S. officials saying that back in April, there were a number of military assets in Iran that they moved around. These are military assets that they will need to use if they're going to carry out some kind of significant retaliation.

So they don't know where they are at the moment. So U.S. intelligence is blinder than it usually is in trying to ascertain exactly what's going to happen. So they don't know specifically what's going to happen.

You hear from the political side still calls for restraint, and we heard this just last night as well from the U.S. Secretary of State, Antony Blinken. We can listen to that.

(BEGIN VIDEO CLIP)

ANTONY BLINKEN, U.S. SECRETARY OF STATE: We are engaged in intense diplomacy, pretty much round the clock, with a very simple message. All parties must refrain from escalation. All parties must take steps to ease tensions.

Escalation is not in anyone's interest. It will only lead to more conflict, more violence, more insecurity.

(END VIDEO CLIP)

HANCOCKS: So you also have John Kurilla, who's like the head of CENTCOM in the region. Washington won't say exactly where he is for security reasons. He was there back in April when Iran carried out that retaliation on Israel.

[04:25:00]

He was helping coordinate the Allied response, which, you know, they managed to fire and take out the majority of the drones and missiles that were attacking Israel out of the sky. He is in the region this time as well, hoping to do something similar, but of course it's a lot more difficult this time because the retaliation from Iran is a great unknown. They don't have the intelligence eyes on the assets that they once had.

FOSTER: OK, Paula, thank you so much for that.

MACFARLANE: Thank you, Paula.

Let's turn to Hasan Alhasan, who is a Senior Fellow for Middle East Policy at the International Institute for Strategic Studies, and he joins us from Manama, Bahrain. Thank you so much for your time.

We were just hearing there about this latest strike on U.S. personnel at an airbase in Iraq carried out by Iranian proxies. We know and we've heard from the Iranian Foreign Minister yesterday saying that they are determined to deter Israel. The big question, though, is really how far Iran are willing to go at this point, and if their response will involve proxies such as Hezbollah.

And given what we saw overnight, what is your expectation at this stage as we wait and we brace for Iran's response?

HASAN ALHASAN, SENIOR FELLOW FOR MIDDLE EAST POLICY AT INTERNATIONAL INSTITUTE FOR STRATEGIC STUDIES: So it's obvious that Iran feels the need to respond to Israel's assassination of Hamas's political leader on its soil, because if it doesn't, obviously it loses face and credibility vis-a-vis its own partners and allies in the region, and it risks emboldening further Israeli action.

And it's not entirely surprising that the U.S. will find itself, to some extent, in the crosshairs of Iran's retaliation, partly because the U.S. is seen as being tied to the hip with Israel, it's seen as vital to Israel's ongoing military campaign in Gaza, and it played obviously a very large and direct role in intercepting Iran's prior attack on Israel back in April.

But I think that ultimately Iran has to walk the fine line of retaliating and being seen as sending a strong message and a strong response back to Israel without nevertheless being dragged into an all-out war, and therefore I think it's unlikely at this stage that the U.S. will be the main focal point of Iran's retaliation. It's more likely to be a concerted effort among Iran and its allied armed non-state groups in the region to inflict a collective response on Israel.

FOSTER: America doing what it can to use its influence with Israel to calm things down. What are the other states in that region that have some influence over Iran doing to try and calm things down on that side?

ALHASAN: Well, I'm skeptical that the U.S. is doing all that it can. In reality, yes, there's been some U.S. diplomatic effort at the moment, including in an attempt to constrain or restrain Iran from retaliating massively.

But if you take a wider lens, I think U.S. policy towards this issue has been part of the problem in the sense that the U.S.'s unconditional support for Israel in the form of opposing the International Court of Justice, the International Criminal Court, shielding Israel from U.N. Security Council resolutions, and providing unconditional military and political support, that has only emboldened Israel to take high-risk action.

I think the broader regional position has been that of a defensive position. Jordan, Saudi Arabia, and other countries in the region have said that they would not allow any party, whether Iran or Israel, to use their airspaces to engage in conflict with one another. I think almost all of the countries in the region are trying to distance themselves and maintain a degree of neutrality.

The regional position is that really the shortest way to de-escalation is through a ceasefire in Gaza, and that so long as the hostilities and the conflict continues and ensues in Gaza, where hundreds of thousands of people have been killed and maimed, I think is the shortest route and I think is a necessary condition towards achieving a lasting de-escalation and lowering of the tensions in the region.

MACFARLANE: And as we wait for a response from Iran, a retaliation from Iran, what is the potential here for a miscalculation in that response? And is that, in fact, perhaps the greatest concern over what could happen?

ALHASAN: The chance of miscalculation is always very significant in cases such as these. And so with Iran's retaliation, if it looks anything like it did back in April, where Iran sent hundreds of missiles, ballistic cruise missiles, UAVs, simultaneously towards Israel, if that happens, then there is obviously always a risk of failure.

[04:30:00]

But also a risk of catastrophic success, where Iran proves too successful at penetrating Israel's and other Western air and missile defenses and landing too many casualties and thereby prompting an all out war.

The other chance of miscalculation is on the part of Iran's groups and allies in the region where an attack, for example, on Iraq base, like the attack we saw last night could lead to the deaths of U.S. troops. Again, dragging the U.S. into the conflict.

Again, high risk brazen Israeli attacks and assassinations like the one we saw back in April on the Iranian consulate or against Hamas's political leader in Tehran. That obviously also raises the risk of the spiraling out of control. So there are a very large number of risks here on the table. The chance of miscalculation always exists in cases such as these.

FOSTER: Dr. Hasan Alhasan, thank you so much for your insights today. Appreciate it.