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CNN International: U.S. GDP Shrinks 0.3 Percent In First Quarter, First Drop Since 2022; Trump Blames Biden As GDP Shrinks In Q1; Sources: Rubio & Bukele Discuss Abrego Garcia Detention; Sources: Last-Minute Disagreements In U.S.-Ukraine Minerals Deal; Gaza Edges Closer To Famine Amid Israeli Aid Blockade. Aired 3-4p ET
Aired April 30, 2025 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:23]
MAX FOSTER, CNN HOST: Hello. Welcome to our viewers all around the world. I'm Max Foster.
This is CNN NEWSROOM, beginning with contrasting narratives on the U.S. economy. What the president says versus what the data reveals.
A new report shows the U.S. economy is heading in the wrong direction. The GDP shrank 0.3 percent. That was in the first quarter, the worst quarter, actually since 2022.
At today's cabinet meeting, President Donald Trump shifted the blame to his predecessor.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: This is a quarter that we looked at today, and I took we took all of us together. We came in on January 20th. So, this is Biden. And you could even say the next quarter is sort of Biden, because it doesn't just happen on a daily or hourly basis.
(END VIDEO CLIP)
FOSTER: Let's check on the markets and get their reaction. And as you can see, they are all red. The Nasdaq often being hit hardest by, you know, a lot of this consumer sentiment down more than 1 percent.
Senior White House reporter Kevin Liptak joins us now.
I mean, neither of us are economists, but how much, you know, is this Bidens fault or is this just a narrative we're going to hear for now?
KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: That's the narrative that you'll hear from the president. In some ways, it's not a surprise. Biden has been a consistent foil for this administration. And in that cabinet meeting that you were just looking at, the name Biden was mentioned 45 times in the span of that one meeting.
So, this is not necessarily a new facet. But when you look at that specific GDP report that came out today, the reason that it has gone negative can be specifically linked to policies of President Trump. You know, oftentimes it's hard to actually ascertain what the connection is between what the president is doing and what the economy is doing. But in this case, the links are pretty direct.
For one, there has been a surge of imports into the United States. That's part of what drove down the GDP. That is because businesses are trying to do a front run on the tariffs that the president has put in place, essentially trying to import as much product as they possibly can before it is applied, these new duties that the president has applied.
The second is a major decline in federal government spending, which is something that the president has been doing very publicly through the DOGE effort, through Elon Musk. This effort to shrink the size of the federal government.
So those two factors are what made this print go negative. And so, when the president tries to blame it on Joe Biden for the policies that he was putting in place up until January 20th, doesn't necessarily hold water.
The other thing that the president pointed to here was the idea of core GDP, you know, which is not an illegitimate concept. You hear a lot of even Democratic economists say that this is a better indication of where the economy is going. It sort of takes into account consumer sentiment, private investment. Those numbers didn't look so bad in this report.
The one sort of downside to that is that this is a backwards-looking report. And that number doesn't necessarily indicate where the economy is going, because the tariffs that the president put into effect, at least in the in the majority of them, have not been reflected in this report. So, it's not necessarily predictive of where everything is going.
So economically, that argument that the president is making there, that this is all Bidens fault isn't necessarily going to carry a lot of weight. I think politically it may not carry a lot of weight either. You know, he has now been in office for 100 days.
He was elected to this office on a large part because he said that he would bring prices down. He has said as much that this was why the American people selected him as president last year. In all of his campaigning, he never mentioned that that would come with a transition period, that people would need to be patient as he applies these tariffs, as he works towards this golden age of manufacturing, he never sort of suggested in his rhetoric that that would be a -- it would be necessary for people to undergo a period of pain.
And so, this comment that he made in the cabinet room just now, which was so striking, saying that children maybe will have to have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more. He's essentially saying that Americans will have to sacrifice as part of this plan to reshore American manufacturing. That was never really a part of his political message last year. And it's not something that is necessarily going to sit particularly well with the American public now that he is president.
FOSTER: Okay. Kevin Liptak at the White House, thank you.
Well, many economists say Donald Trump's monumental effort to reshape the global trade system is likely to send inflation climbing in the U.S., could even trigger a recession as well.
[15:05:10]
Joining us now from New York, CNN's Matt Egan.
So I think in many parts of the world, a recession is defined as two quarters of declining growth. Theres a slightly different definition, though, in the U.S., Matt.
MATT EGAN, CNN REPORTER: Yeah, that's right, Max. Technical definition is back to back quarters of negative growth, but really, officially, recessions are declared by the National Bureau of Economic Research, and they look for a prolonged, and widespread period of decline in the economy.
And look, it's too early to say that there's going to be a recession here. This is a decline in GDP, but consumer spending continues to stay positive right now. Manufacturing hasn't gone completely negative either.
So it's just way too early to say that that's what's going to happen, but obviously. This is not the kind of report that the White House wants to try to explain.
Now, what I think is helpful is to look at the trend here. When the president took office, he inherited an economy that was growing at a pretty solid pace, 2 to 3 percent GDP, quarter after quarter, really for the last year, year and a half. You could see it on that chart.
There was a decline in early 2022. But it was just one quarter of decline. As it turns out, after some revisions and other than that, it was pretty solid growth. So what happened, right? Why do we have this decline in GDP, which was worse than anticipated? Well, as Kevin laid out, it's really two major drivers here, right?
One, it's the tariffs, right. There was a desire to try to beat the clock on tariffs. So businesses and consumers, they imported a lot of goods from overseas to try to get ahead of those import taxes. And that's important because when imports go up as much as they did here, up 41 percent in the first quarter after almost no change the prior quarter, when you see imports outpace exports, that subtracts from GDP. In fact, this is the most that net exports have subtracted from GDP in any quarter, going back on records that go back to the 1940s.
And obviously the tariffs, that is not a Biden era policy. Sure, President Biden did have some tariffs in place, but nothing like the tariffs that have been threatened and imposed and that are scheduled to go into effect under President Trump. So clearly that is a Trump era policy. The other one, as Kevin noted, was federal spending that was down that
also subtracted from GDP. And obviously, that is related to the layoffs. The canceled contracts, the spending cuts in the federal government led by DOGE.
Now, there were some numbers here that weren't terrible, right? Core GDP, which is final sales to domestic purchases. That held up pretty well. It actually accelerated slightly. And that's because businesses and consumers, they did continue to spend money. But the problem here again is there's a risk of a hangover. Right. Because they were trying to beat tariffs.
And so what happens when they've already got all the stuff they need right? I mean, if you're someone who went out and bought a car in March because you're worried about auto tariffs, you're not going to buy a car in April or in May, right? Same thing if you're trying if you're a farmer, you were worried about tariffs and you bought a tractor. So, there is a risk of a giveback in this quarter.
And that is one of the reasons why a lot of the economists that I talked to, Max, they are concerned that if these tariffs are not rolled back soon, if the president does not change course on the trade war, then yes, they are concerned about a potential recession in the world's largest economy.
Back to you.
FOSTER: OK. Matt Egan in New York, thank you so much for bringing us that.
Going back to Washington, sources tell CNN, U.S. Secretary of State Marco Rubio and Salvadoran President Nayib Bukele are in direct talks about the fate of Kilmar Abrego Garcia. He is the Salvadoran born Maryland resident. The U.S. has admitted to wrongly sending to a high security prison in El Salvador.
Rubio today declined to say whether there's been a formal request to return Abrego Garcia to the U.S.
(BEGIN VIDEO CLIP)
MARCO RUBIO, SECRETARY OF STATE: The conduct of our foreign policy belongs to the president of the United States and the executive branch, not some judge. So, we will conduct foreign policy appropriately. If we need to, but I'll never discuss it, and no one will ever make us discuss it, because that's how foreign policy works.
(END VIDEO CLIP)
FOSTER: CNN crime and justice correspondent Katelyn Polantz joins us now.
I mean, everyone wants to know what went on in that conversation, according to the sources.
KATELYN POLANTZ, CNN CRIME AND JUSTICE CORRESPONDENT: Yeah. And Rubio is not saying there in the oval office. But according to our sources, there's a couple different things that we're hearing. One, that over the past week or so, Rubio and Bukele, they were in touch.
[15:10:00]
The U.S. separately at one point asked for the return of Abrego Garcia to the United States after he was mistakenly sent by U.S. authorities to El Salvador. And courts have told the U.S. over and over again, you must facilitate his return.
What happened then, though? The El Salvadoran government apparently said, no, they're not interested in bringing him back. And then the other thing that we were hearing was that there was a slight pause of things in Abrego Garcia's court proceedings over the past seven days. Things were happening confidentially behind the scenes, and that was because there was a possibility of a diplomatic resolution.
But all of that, it may be political theater because everybody is back where we were a week ago, not willing to engage publicly on what is going on. The U.S., Donald Trump saying El Salvador doesn't want to send him back. I could pick up the phone and ask, but I'm not going to do that. We are not going to do anything more. And this is all in the hands of the lawyers.
Here's a little bit more of what Donald Trump had to say at that cabinet meeting when asked about this by a reporter.
(BEGIN VIDEO CLIP)
REPORTER: Mr. President, you told ABC News yesterday that you could get Abrego Garcia back if you wanted to. Do you think President Bukele would turn you down if you made that request?
TRUMP: I really don't know. I know that he's been a great friend of our country. He's gotten a lot less money than this would take from us if we were going to build these jails and do what he's doing. And they run a very professional operation, I don't know, I haven't spoken to him. I really leave that to the lawyers. And I take my advice from Pam and everybody that is very much involved. They know the laws and we follow the laws exactly.
(END VIDEO CLIP)
POLANTZ: So Trump there, pointing again back to his lawyers. His lawyers are still in court fighting against Abrego Garcia attorneys and before a federal judge in Maryland who has asked a lot of questions.
Max, what is next in this case is that it will move forward again under the judges guidance. And what she is saying, Judge Paula Xinis, is that the U.S. needs to show more evidence, answer questions, put people under oath about what they have tried to do to facilitate Abrego Garcia's return, and more details that they can share both on him as a detainee in the U.S. who was mistakenly sent to El Salvador. And on that program, the U.S. has using that prison for terrorists in El Salvador, that Abrego Garcia was initially in. Back to you.
FOSTER: Katelyn Polantz in D.C., thank you so much for that.
Meanwhile, the Trump administration weighing up more controversial methods of removing some migrants this time by sending some of them to Libya or Rwanda. The plans would apply to migrants with criminal records, according to multiple sources.
White House officials are also trying to agree on a plan that would see asylum seekers apprehended at the U.S. border sent to Libya. The United Kingdom attempted a similar plan with Rwanda in 2022, although it never fully got off the ground due to legal challenges. It was later on scrapped as well.
Sources say a last-minute disagreement appears to be threatening to derail the minerals deal that the U.S. and Ukraine were hoping to sign today. Ukraine's prime minister said earlier he wanted to ink the deal within the next 24 hours once all the details were finalized, but that goal may now be in limbo.
U.S. Treasury Secretary Scott Bessent said earlier that the U.S. is ready to sign, but the Ukrainians decided to make last minute changes. He said he was sure the Ukrainians would reconsider that.
Clare is with us.
I mean, these are debates going on behind closed doors. But, you know, the minister is still heading towards Washington.
CLARE SEBASTIAN, CNN CORRESPONDENT: Yeah, we believe that she, the economy minister, may now have arrived in Washington. The Ukrainian delegation, with the full intention of signing a deal, we're told by sources on both sides that there's also, as well as these sort of last minute changes that the U.S. claims Ukraine has tried to make. Theres a disagreement over how many deals are actually going to be signed today. This is a framework deal. And then two technical deals on the sort of investment partnership fund that this deal sets up.
The Ukrainian side, according to a source familiar with the matter, believes that more work needs to be done. The U.S. side thinks that they're going to sign all three of those at the same time.
But look, I think there is a will on both sides to get this done. This is something that both sides care about. That's why they've lived through this rollercoaster over the last couple of months for Ukraine, of course, this builds on the momentum that we saw in the Vatican, that meeting that seemed to sort of reset the relationship between Trump and Zelenskyy. It provides an incentive for more military aid, because that is essentially what is going to be paid into the fund. According to the details that we have seen so far, at least, that will be considered the U.S. contribution to the fund and President Trump, even though, according to the Ukrainian prime minister, this would not encompass past aid, he wouldn't be, in his words, getting his money back. As we've heard him talk about this deal, would only sort of include future aid. It still would be a political win because we know things have stalled.
And he talked about it as though he thinks it's still going to go ahead in this cabinet meeting.
(BEGIN VIDEO CLIP)
TRUMP: They're very good rare earth. As you know, we're looking for rare earth all the times.
[15:15:01]
Rare earth is called rare for a reason. And they have a lot. And we made a deal where our money is secure, where we can start digging and doing what we have to do.
It's also good for them, because you'll have an American presence at the site, Chris. And the American presence will, I think, keep a lot of bad actors out of the country, or certainly out of the area where we're doing the digging.
So we made a deal, and I assume they're going to honor the deal.
(END VIDEO CLIP)
SEBASTIAN: It seems they're going to honor the deal. One sort of fact- check there is that were not talking so much about rare earths as we are about sort of general critical minerals, natural resources. Ukraine doesn't have a globally significant reserve of rare earths, as we believe it. But either way, these are prized elements in all sorts of technology.
He, you know, clearly prizes this deal as a political win. And I think, you know, that shows that there is still momentum behind it, even though we see these last-minute hitches.
FOSTER: In terms of what the deal might look like -- I mean, there are some journalists that say they've seen the terms of it, but as we know, it's been changing all the time. So we can't rely on any of that.
But the one consistent idea is this idea of a investment fund set up by America, which is effectively paying, isn't it, for the minerals.
SEBASTIAN: So what we learned the Ukrainian prime minister spoke extensively on Ukrainian tv this afternoon. And you're right, there have been a lot of iterations, been many months in the works. This deal is that it seems to have gone pretty well, this negotiation for Ukraine.
Number one, he says that they secured a concession, which means that its only future U.S. military aid that will be considered the U.S. contribution to this fund. Ukraine will pay cash into the fund, he said, which will come from the proceeds of future sort of natural resource licenses and royalties, not ones that are already underway.
So in a sense, this is a -- this is a forward-looking deal. It also does not mean that the U.S. takes ownership of any of these natural resources, simply that they will eventually get to share in the profits. But even that won't be according to this deal that outlined by the prime minister won't be for ten years, up until the ten-year point. All of the proceeds, he said, will be reinvested back into the Ukrainian economy.
So what we don't know yet is if there are any actual security guarantees in the deal. President Trump, in those comments that you just heard, seem to suggest that, as he has done before, that this in itself would function as a security guarantee. So we wait to see more on that.
FOSTER: Clare, thank you so much. We'll hear tonight, possibly.
The United Nations calls it a silent killer. Israel's total siege of Gaza that's blocked all humanitarian aid for two months now, with no food coming in. Starvation is an increasing threat. But even those who survive the siege may suffer lifelong consequences from malnutrition.
Jeremy Diamond shows us how Gaza is edging ever closer to famine whilst the world looks on.
(BEGIN VIDEOTAPE)
JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT (voice-over): Inside her fly- infested tent, Yiman Rajab (ph) is doing her best to keep her six children alive.
Today's survival looks like this, sifting the half bag of flour she found on a garbage dumpster in Gaza City, after all of its bakeries shut down. It is rancid, crawling with pests and clear signs of contamination.
But Rajab hopes she can salvage enough to make bread for her children.
My kids are vomiting after they eat it. It smells horrible, she says. I keep cleaning it and it won't get clean. But what else can I do? She asks.
What will I feed my children, if not this?
Rajab is one of hundreds of thousands of parents in Gaza struggling to feed their children, an entirely man-made crisis that is rapidly spiraling.
For nearly two months now, Israel has carried out a total siege of Gaza, refusing to allow a single truck of humanitarian aid or commercial goods into the strip.
Israel says, it is trying to pressure Hamas into releasing the hostages, but it is civilians in Gaza who are paying the heaviest price.
There is no food, no nothing. Death is easier than this life, this elderly woman says.
This soup kitchen in central Gaza can now only provide one meal a day to those who are growing increasingly desperate.
This man says he has been standing in line for hours, hoping to feed his family.
These scenes an echo of last summer when hunger swept across Gaza, killing 52 Palestinians according to the Ministry of Health. The Biden administration pushed Israel then to let in aid. There is no such public pressure from the White House now, which says it backs Israel's tactics.
Food warehouses are now barren.
YASMIN MAYDHANE, EMERGENCY COORDINATOR, WORLD FOOD PROGRAMME: We are in a position now where over 400,000 people that were receiving assistance from our hot meal kitchens, which is the last lifeline for the population, is in itself grinding to a halt.
[15:20:03]
DIAMOND: Cases of acute malnutrition are now spiking. United Nations said nearly 3,700 children were diagnosed in March, 85 percent more than the previous month.
Five-year-old Osama Al-Arakab (ph) is among those most severely affected by Israel's blockade, which has exacerbated his pre-existing medical conditions. He has lost eight pounds in the last month and now weighs just 20 pounds. His skin sticking to his bones, every movement is painful.
Because of this war, my son has reached this state, she explains. Now he can barely walk. I have to carry him everywhere.
Every day, his condition worsens. Every day, Israel prevents food from getting into Gaza, Osama's life becomes more at risk.
Jeremy Diamond, CNN, Jerusalem.
(END VIDEOTAPE)
FOSTER: Pakistan on edge. Officials believe an attack is imminent after last weeks massacre in Kashmir. We'll take a look at the fallout if India does attack.
(COMMERCIAL BREAK)
FOSTER: Pakistan says it has reason to believe an attack from India is imminent. A potential return to fighting between the nuclear armed neighbors comes after gunmen killed 26 tourists in the disputed Kashmir region last week. The attack happened on the Indian side of control and Delhi quickly accused Islamabad of supporting terrorists. Pakistan denies it was involved. Now the U.S. and China are urging restraint from both sides in a bid to avert all-out war.
Joining us now, "Foreign Policy Magazine's" Michael Kugelman, who specializes in South Asia.
Thank you so much for speaking to us.
I mean, obviously, this is a running tension between these two countries. Is it too much to be talking about or worrying about war at this point?
[15:25:00]
MICHAEL KUGELMAN, SOUTH ASIA ANALYST, FOREIGN POLICY MAGAZINE: I think it's unlikely there will be an all-out war. Since these two countries became formal nuclear states in the late 1990s, there have been military conflicts, but they've been very limited and very brief. So, I think it's unlikely there will be an all out war.
But I do think it is quite likely that India will respond with some type of military action. It may be covert. It may not happen for another -- a few days or a few weeks even. But I do suspect there will be some type of Indian kinetic action. And if there is, it's all but likely inevitable that Pakistan would respond to that.
FOSTER: India has been building up its military, hasn't it, in recent times. And there's some talk amongst Indian politicians on the prime ministers side saying he needs to show strength to show this new strength of the military to send Pakistan a message. Is there is that something you agree with?
KUGELMAN: Well, I mean, there's a lot of pressure on the Indian government to do something muscular because of the nature of the terrorist attack last week in Kashmir that precipitated this, this crisis. It was an attack that targeted civilians, tourists. And it's very unusual in Kashmir for there to be a high casualty attack like that that kills so many civilians. It was the most deadly attack on civilians since the Mumbai terrorist attacks in 2008.
So, a lot of pressure on India to respond, to restore deterrence once and for all, though I do think that its options might be limited. Yes, India's military modernization has come a well, but Pakistan's own conventional military forces are quite strong as well, particularly along the disputed border on the line of control.
So, I do think that India would have to be careful about how much it responds, what level of intensity it might choose to use in terms of military capabilities. This is why I think that it's more likely we'll see limited military action and likely covert type activities such as perhaps targeted assassinations of militants inside Pakistan.
FOSTER: As you say, you know, the Pakistani government will feel a duty to, to its own people as well to respond if India does. In the past, America would get very involved, wouldn't it, in calming tensions down. That seems less likely now, doesn't it?
KUGELMAN: Yeah. You're right. There is a precedent of the U.S. intervening during India-Pakistan crises to push for de-escalation this time around. You know, initially the Trump administration was expressing messages of solidarity and support for India, suggesting that it might just be happy to step back and let India respond, viewing that type of response as a counterterrorism imperative. But now, we are seeing the state department, including Secretary of
State Rubio, pushing for the two sides not to escalate. And I think that's significant. It could be because Washington is now realizing just how high the escalation risks are in this case.
I do think that other countries might be capable of mediation as well, particularly the Arab Gulf countries, the Saudis, the Emiratis, the Qataris, given that they have strong relations with both India and Pakistan and have a lot of leverage because they provide a lot of energy supplies and other assistance to both India and Pakistan.
FOSTER: I had a comment from a viewer talking about it feels like the whole world is descending into wars. You can understand that, can't you, when people watch the news and you've got these conflicts and they they're ongoing, they're not being resolved. And, you know, there's a huge concern that, you know, multiple wars going on at once could sort of trigger something larger.
KUGELMAN: Yeah, it's not a good thing. And we have to keep in mind that while limited war is most likely between India and Pakistan, these are -- these are two countries that have nuclear weapons. You know, their -- their neighbors, their nemeses and their nuclear armed.
And it's very unlikely that things would escalate to a point where we have to worry about any type of nuclear exchange. But, you know, there are high stakes. This is not just a simple case of two countries that don't get along sparring, maybe having a military skirmish.
You do have to worry about the broader context, given that both of these countries have nuclear weapons and have been willing to use limited military action against each other since they went nuclear in the late 1990s.
FOSTER: Michael Kugelman, thank you so much for your insight and your deep knowledge of that region. Everyone's watching it.
Now, still ahead, a Palestinian Columbia University student who was just released from U.S. custody has a defiant message for President Donald Trump.
(COMMERCIAL BREAK)
[15:32:43]
FOSTER: Welcome back.
U.S. President Donald Trump trying to downplay potential supply chain interruptions caused by his tariffs. As the markets continue to slide after a first quarter slowdown and renewed recession fears, President Trump said today the U.S. doesn't need most of China's goods and had this warning to parents.
(BEGIN VIDEO CLIP)
TRUMP: Maybe the children will have two dolls instead of 30 dolls, you know, and maybe the two dolls will cost a couple of bucks more than they would normally. They have ships that are loaded up with stuff, much of which not all of it, but much of which we don't need.
(END VIDEO CLIP)
FOSTER: We'll hear the closing bell on Wall Street in less than 30 minutes from now, but this is the current picture, pretty negative. The Nasdaq down more than 1 percent.
Yung-Yu Ma is the chief investment officer with BMO Wealth Management.
Thank you so much for joining us.
It's interesting hearing Donald Trump's comment on the dolls, because he is making it very clear that, you know, people are going to have less, prices are going to increase. But it wasn't part of his campaign, so we weren't prepared for that. He said prices would fall.
YUNG-YU MA, CHIEF INVESTMENT OFFICER, BMO WEALTH MANAGEMENT: Yeah, that's right. It's great to be here. A lot of people are finding out that it's going to be a big shock when prices are increasing. Both for small items like he was mentioning dolls, but also for big ticket items like automobiles. So that's going to be something that takes an adjustment period. Its not that the U.S. economy is unable to withstand some degree of price increases, but sharp price increases and price increases that are somewhat across the board are tough to digest.
FOSTER: Donald Trump today said the stock market falls were nothing to do with tariffs. What's your industry's view on that?
MA: Well, I think it's pretty clear that the uncertainty that the tariffs have caused and the potential for an economic slowdown because of the tariffs and the disruption because of tariffs are causing the stock market a lot of concern and angst. There are other factors in play, certainly. The stock market started the year at very high valuation levels. So, there was some fragility there already built in.
[15:35:00]
When you get some disruption and you're priced for perfection you can have a sharper decline than would otherwise be the case. But it's clear there's a lot of uncertainty still that tariffs are disrupting businesses and have the potential to disrupt consumer spending if those prices do start to rise.
FOSTER: In terms of the economy figures, he's, you know, the economy shrunk in the first quarter, which we haven't seen, I think, since 2022. Donald Trump is blaming Joe Biden. There's, you know, there's some argument for that, isn't there? There could be a delay. But Biden's economy was rising.
MA: Well, I don't think the question, if you dig into the numbers, is so much related to the administration, the prior administration. I think the numbers really bore out that so many companies were trying to front-load their imports to try to get ahead of tariffs. And imports are actually a subtraction from GDP. So there's a surge in imports, absent that surge in imports, GDP would
have been positive. But consumer spending has slowed down. And that's the big question mark here. Whether or not consumer spending and particularly the labor market can hold up in the coming months.
We do think that consumer spending, although it's slowed down, it didn't go negative. It was still positive. It was lower than it was in the prior quarter. But consumer spending was still positive. And we think there are signs that consumers will maintain a reasonably positive level of spending, even amid the uncertainty that we're facing now, just not a healthy and strong level of spending.
FOSTER: I know a lot of economists, you know, the dreaded fear is stagflation, which is when you've got this small, you know, shrinking growth, you've got rising unemployment and rising prices. It's so hard to manage, isn't it? I mean, at what point do we define that? I mean, what are you looking for?
MA: Well, stagflation, as you talked about with both rising prices and slowing growth, definitely conjures up fears of the 1970s when you had sharply rising prices and sharply slowing growth. I think the comfort that we can take now is we don't expect either of these two things to happen dramatically.
Growth is going to slow. We do expect that to be the case. We just don't expect it to slow dramatically.
Prices are going to rise in most cases. They're not going to rise sharply. There could be some goods particularly those that are single sourced from China. And it's difficult to find other suppliers for that where they do rise sharply.
But by and large a lot of the price increases will be relatively modest relative to the inflation that we saw just a couple years ago. So, I'm not sure that thinking about stagflation, although it does fit the general definition, it doesn't fit the prior experiences. Weve had stagflation where it was very damaging to the economy, very damaging the markets.
I think the economy will be able to weather this bout of stagflationary tendencies that we have, but it's still going to be an adjustment process.
FOSTER: Okay. Yung-Yu Ma, thank you so much for joining us from BMO.
Now, a Columbia University student who was just released from U.S. immigration custody has a message for President Donald Trump. And it is: I'm not afraid of you. Mohsen Bhadawi spoke at a courthouse in Vermont after a judge ruled he should be freed on bail as he challenges the administration's attempt to deport him.
Mahdawi is a permanent U.S. resident who was born in the West Bank and helped lead pro-Palestinian protests at Columbia. He was arrested by immigration agents two weeks ago.
Let's get more from CNN's Polo Sandoval in New York. I mean, why was he released? What's the story here, Polo?
POLO SANDOVAL, CNN CORRESPONDENT: Max, this case is important, as it is certainly a test for Donald Trump's ongoing efforts to specifically go after pro-Palestinian students here in the U.S., especially those with precarious immigration status, and then put him on a fast track towards deportation. And by all accounts, when you look through the federal court documents, as I have, you do get a sense that that was the effort on behalf of the Trump administration when it comes to this Palestinian man. This is some fresh video of him emerging from the federal courthouse in Burlington, Vermont, this morning after he was bonded out.
Now, to be clear, his immigration proceedings, that case, it's not going anywhere. It's still ongoing. However, this now gives Mohsen an opportunity to address it and defend himself outside of detention, a reminder that he had been active, politically active in various demonstrations on the Columbia University campus. And that's what his attorneys argue made him the target of the Trump administration, calling his detention the last two weeks not just unconstitutional, but also retaliatory.
I want you to hear directly from him in terms of some of his first words after he was able to bond out of detention earlier this morning.
(BEGIN VIDEO CLIP)
MOHSEN MAHDAWI, ARRESTED BY ICE AFTER LEADING COLUMBIA UNIVERSITY PROTESTS: Yes, you might think I am free, but my freedom is interlinked to the freedom of many other students, including Rumeysa Ozturk and Mahmoud Khalil.
[15:40:07]
And those freedom., and those students -- and those students don't have the privilege, which should be actually the due process which I went through. They don't have that because they are being treated under immigration court's jurisdiction.
(END VIDEO CLIP)
SANDOVAL: You heard Mahdawi's direct reference to Mahmoud Khalil. Thats his fellow Columbia University student, whose case we are also following. He's still in detention as his case has made its way to the U.S. Supreme Court, and also potentially, he faces the potential of deportation.
But back to Mahdawi's case, just a reminder for viewers around the world as to how he came into custody, he actually showed up at for a standard appointment as part of his naturalization process, since he was a green card holder for 10 years to take the oath of U.S. citizenship, even according to his attorneys, passed that citizenship test.
But at one point during that appointment, on April 14th, that's when authorities said that they needed to address something. And that is when his attorneys say Homeland Security investigations agents then arrived on scene and took him into detention here again until today. Finally free on bond as his case continues to evolve.
But again, just to really emphasize what we said at the top, this will be a true test when it comes to Donald Trump's -- the Donald Trump administration's ongoing efforts to specifically go after students in the United States who have expressed pro-Palestinian sentiments and participated in demonstrations.
FOSTER: Yeah, it's fascinating to see all this play out.
Polo, thank you so much.
SANDOVAL: Thanks, Max.
FOSTER: Up next, they're an award-winning Irish rap group with fans around the world. But Kneecap's concerts are now getting canceled left, right and center.
(COMMERCIAL BREAK)
FOSTER: They're known for political lyrics, provocative concerts, but the Irish rap group Kneecap are facing a growing backlash over their actions on stage.
[15:45:03]
After the band denounced Israel at Coachella a few weeks ago, police in the U.K. say they are looking at footage from previous concerts, where the band appear to shout in support of Hamas and Hezbollah. During another show, they appeared to tell fans to kill their local member of parliament.
Several of their concerts in Germany and the U.K. have since been canceled. The band says those clips have been taken out of context, saying let us be unequivocal, we do not and have never supported Hamas or Hezbollah. We condemn all attacks on civilians always. We also reject any suggestion that we would seek to incite violence against any MP or individual ever.
Kurtis Reid covers the entertainment for the "Belfast Telegraph", joins us now.
Thank you so much for joining us.
I've just given the viewers very confusing messages about what they've said and what they haven't said. I mean, how would you describe it?
KURTIS REID, REPORTER, BELFAST TELEGRAPH: I mean, I would describe it as a storm that Kneecap are very much involved in at the minute. Like you said in the intro, this all stems from video footage that has emerged from a 2023 gig in London, in which one of the members appeared to say the only good Tory is a dead Tory and said kill your local MP. Separately, there's other footage from a gig last year in which they appeared to suggest that they -- they -- well, they shouted, you know, up Hamas and up Hezbollah appearing to suggest support for the two groups.
I mean, it's, you know, we've had everybody from the prime minister that has, you know, came out and said, you know, about these comments to here in Northern Ireland, you know, lots of MPs outraged by these comments and, you know, including down south as well.
FOSTER: I mean, if we take those comments out of context as to say they are deeply offensive and many professions would react in the same way, but there has always been an exception, hasn't there, for music to, you know, to be allowed to express feelings a bit like comedians. And a lot of people are seeing this as a massive freedom of speech issue. They should be allowed to express political views and not be banned from events.
REID: Yeah. And I think, you know, there is the argument there that, you know, obviously Kneecap have a right to freedom of expression, like you said, you know, music and art in general has always been political. And, you know, this is not the first music group, and it's certainly not the first rap group to display strong political opinions or an anti-establishment sentiment.
But, you know, I think when it comes to the appearance of inciting violence is, you know, obviously when people draw the line and I think their apology, which was released on Monday night I don't think it really calmed things, you know, that people were really were taken aback by their apology, including the widower of Jo Cox, who I spoke to for -- for the "Belfast Telegraph". He called it half an apology,
But like you said, I mean, it is, you know, it is freedom of speech. I don't think anybody who follows Kneecap or anybody who's a fan of kneecap, is particularly surprised by this, you know, political sentiment that they are, you know, expressing, you know, that they have made their feelings perfectly clear. But whether or not this was the right platform and the right choice of words is certainly up for debate.
FOSTER: Presumably a lot of their fans, you know, reflect these views. What's their reaction to the event organizers are effectively canceled the band?
REID: Well, I mean, I wouldn't say that, you know, a lot of fans reflect their specific views. I'd say, you know, a lot of their fans, you know, have a have a pro, you know, Palestinian approach. Kneecap is very outspoken about the ongoing situation in Gaza.
When it comes to an anti-Tory or an anti-conservative sentiment, you know, I think that that's, you know, you know, very common amongst their fans as well. I would say that there has been fans that have been outraged by the kill your MP comment. You know, I don't think that this is a case of, you know, everybody understanding this and you know, Kneecap's apology did address that. But like you said, said that it was taken out of context.
In terms of events, supporters, you know, these are private events, music festivals, you know, have a right to, to platform who they want. We saw yesterday a decision by multiple festivals in Germany and Hamburg and Cologne and Berlin, who -- who all said that they would be canceling their gigs with -- with Kneecap. They didn't express a particular reason, but just said that they no longer would be scheduled to perform, and that the same thing happened with the Eden Project in England yesterday as well, where they said that the group would no longer perform.
FOSTER: But -- yeah. Carry on.
REID: No, I was just going to say, I mean, in typical Kneecap fashion, they then released new gigs in the spots. You know, there was left vacant by these.
FOSTER: Well, they certainly got a lot of publicity out of it, haven't they, as well. And, you know, it's really blown up into a global story. So, more people have heard about them and they're probably going to, you know, check them out anyway. Just having heard about them.
[15:50:03]
Kurtis Reid, really appreciate your time today.
Trial beginning for the Australian woman accused of killing members of her former husband's family by serving them poisonous mushrooms. We'll tell you what happened in court.
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FOSTER: A beef wellington lunch turns deadly in Australia, and its cook is now standing trial.
Erin Patterson is accused of killing her estranged husband's parents and aunt after serving them lunch cooked with death cap mushrooms in 2023. She's also been charged with attempted murder of her husband's uncle, who survived. Patterson denies the charges.
Estelle Griepink with Seven News has that story for you.
(BEGIN VIDEOTAPE)
ESTELLE GRIEPINK, SEVEN NEWS REPORTER (voice-over): Erin Patterson's murder trial delivering a new bombshell revelation. A jury has been told the accused killer invited her in-laws for lunch to tell them she had cancer, a diagnosis the prosecution and defense agree was never true.
The guests Don and Gail Patterson, Gail's sister Heather Wilkinson, and her husband Ian, were served individual beef wellingtons containing mushrooms with a side of mashed potatoes, green beans and gravy. While their meals were presented on large gray plates, Ms. Patterson ate from a smaller, lighter colored plate. Gail Patterson, later noting to her son, Erin, put her food on a different plate to us. I wondered why that was.
Don Patterson, Gail Patterson and Heather Wilkinson later died in hospital. Ian Wilkinson eventually recovered. The jury was also told about the iNaturalist website, where users upload photos and locations of local flora and fauna. It's alleged that after two users posted about finding deathcap mushrooms in the towns of Locke and Outtrim, Ms. Patterson's phone was tracked to the same location.
Erin Patterson has always maintained her innocence and has pleaded not guilty to all charges. Her defense told the jury while she may have foraged for mushrooms, she never sought out deadly ones.
Estelle Griepink, Seven News.
(END VIDEOTAPE)
FOSTER: Now, it's a pup play date for the record books. Meet Pearl and Reggie. According to the Guinness World Records, they are the smallest and tallest dogs in the world. It looks like it.
Pearl is a chihuahua measuring a little over nine centimeters. I mean, she's literally as large as the other dog's head. That's 3-1/2 inches tall.
Reggie is a Great Dane, towering over her one meter tall or three feet, four inches. Now we're seeing a chihuahua and a pup in a cup.
Now, the duo recently met up in the state of Idaho for a playdate. Their owners say they got along great, despite that massive difference.
Finally, what's the strangest thing you've seen on your drive home? Well, unless you live in Australia, it can't be as bizarre as this one.
This is Sheila, a runaway kangaroo who caused chaos on a highway in the U.S. state of Alabama. She jumped into the road and cut into traffic, shutting down part of the interstate on Tuesday. Police say her trip caused two vehicles to crash, but thankfully, Sheila got away unharmed.
The kangaroo was later tranquilized and returned to her owner.
Thanks for joining me here on CNN NEWSROOM. I'm Max Foster.
"QUEST MEANS BUSINESS" with Richard up next.
