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Travis King to be Expelled from North Korea; Hutchinson Details White House Chaos; Hollywood Writers Return to Work; Neel Kashkari is Interviewed about Interest Rates; Baltimore Police Seeking Murder Suspect. Aired 6:30-7a ET

Aired September 27, 2023 - 06:30   ET

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

[06:30:00]

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: What state run media is saying, but they say that he believed it was an unequal U.S. society, which is why he decided to cross into the country.

Now, what we know at this point is they have said that they have decided to - to expel him. We don't know exactly when that will be or where that will be. From past experience, and precedence, they are generally expelled through China. So, he could - he could well be flown to Beijing, for example, and then flown on from there. We simply don't have that information at this point. This is all that state run media is giving us.

It does come on the eve of an important Korean holiday. It is Korean thanksgiving that starts in a day or two, a significant calendar time of the year.

And what we know from just last month, August, in fact, when North Korea finally admitted that Travis King had crossed into the country illegally, was that he had admitted that he had done this voluntarily. And that is what we heard from the South Korean side as well and eyewitnesses that were within this private tour group up at the DMZ that say that he simply ran for it, ran across the border, tried to get into the building on the North Korean side. The door was locked. So ran around to the back and was then bundled into a car with North Korean guards.

So, what we know today is that he will be expelled. What we're waiting to find out is exactly how, where and when.

POPPY HARLOW, CNN ANCHOR: Yes. Rare to see an expulsion like this?

HANCOCKS: Not really. This does happen. And what we did hear back in August, which some experts I spoke to pointed to, was the fact that North Korea said that he had mentioned he wanted to either stay in North Korea or be sent to a third country. Now, the fact that they gave the option of this third country suggested they didn't necessarily want to hold on to him.

Now, the overwhelming feeling is that they will have debriefed him fully. He is a U.S. service member after all and could have useful information for them, at least in their eyes. But, yes, that that's latest we know, Poppy.

HARLOW: OK. Thank you for the reporting on the breaking news, Paula. We appreciate it.

Now to politics here in the U.S. Former Trump White House aide Cassidy Hutchinson warning yesterday that Donald Trump will not have any guardrails, she says, if he wins a second term in office. As a top aide to then White House Chief of Staff Mark Meadows, she had a front row seat to the former president's efforts to overturn the results of the 2020 election.

PHIL MATTINGLY, CNN ANCHOR: Now, Hutchinson's new book paints an even more chaotic picture of the end of the Trump administration than briefly known. She then sat down for an extended interview with CNN's Jake Tapper to talk all about her new revelations, American democracy and the Republican Party.

(BEGIN VIDEO CLIP)

CASSIDY HUTCHINSON, FORMER WHITE HOUSE AIDE: To me it is sad that we're in this place, as a country, where we are looking at somebody who has executed this horrible assault on our democracy, and we are continuing to give this person a platform. That's not what we should stand for as Americans. And I think that Donald Trump is the most grave threat that we will face to our democracy in our lifetime and potentially in American history. Especially in the Trump administration and in 2020, every day was a hair on fire day. We were swimming to stay afloat, but most of us were drowning.

The counts that Donald Trump is currently facing, he is facing counts of obstructing the Constitution. To me, that is disqualifying. Donald Trump should be disqualified for being the president of the United States. To me that's not a question.

I see someone that didn't have to be in this position. You know, I -- I see that picture and I feel sorry for him in some ways because he had a lot of opportunities to do the right thing and to come forward. You know, he's a man that has a family.

(END VIDEO CLIP)

MATTINGLY: Here with us now, former deputy White House press secretary under President Trump, Sarah Matthews. Errol Lewis is back with us. Also "Axios" political reporter Hans Nichols.

Guys, welcome to the table.

Sarah, I want to start with that last point because that stuck out to me. Mark Meadows is not an idiot. He's quite savvy of -- as an operator in Washington, D.C. And I understand what Cassidy is saying about the family and of course you should have empathy for somebody and their family and their personal situation. But do you think he didn't know what was going on here?

SARAH MATTHEWS, FORMER DEPUTY WHITE HOUSE PRESS SECRETARY, TRUMP ADMINISTRATION: No. He knew exactly what was going on. And he as much said it, I feel like, when he's talking about the Georgia case. He said something to the extent of, well, he was scared that the president would yell at him. So, he was carrying out the president's marching orders out of fear because he wanted to stay on Donald Trump's good side.

And I do think that Mark Meadows knows better. He is a smart operator, as you said. He's politically savvy. And he did know that the election was not stolen. He knew that because multiple people had told him of that. There's never been a single shred of evidence produced. Bill Barr, the attorney general, told the president and Mark Meadows that there was no evidence of this.

[06:35:03]

And so he could have avoided this whole situation. And it really does pain me, honestly, to see that interview of Cassidy because they were so close. And I witnessed that relationship firsthand at the White House. And so I know that it hurts her to see him in this situation as well.

HARLOW: What's the impact of her writing this, telling all of these things to Jake? We heard her testimony before the January 6th Committee. We saw her depositions.

ERROL LOUIS, CNN POLITICAL COMMENTATOR: I - look, I think she is sort of a beacon for the future of the Republican Party. This is what your future looks like. You know, both her age, her voice, her --

HARLOW: Can look like if - if you so choose as a party.

LOUIS: Well, I mean, you know, look, they can turn their backs on the Cassidy Hutchinsons of the world. She said in the interview that she has not changed her registration.

HARLOW: Right.

LOUIS: She remains a Republican. But demographically, that's who the future belongs to. It belongs to the young people who want to sort of give up their time and their careers and go into public service. And we want to find as many people like that as possible. And she is saying very clearly in a very poised manner that she has loyalty, she has value commitments that the Republican Party has turned its back on. If they're smart, whoever the future of the Republican Party is going to be, the future leaders, the current leaders, they will try to sort of take a couple of steps in her direction instead of slavishly charging down this path of trying to relegate the 2020 election.

MATTINGLY: Hans, I think what's striking, and I think this goes to Errol's point, is you look at the people around the former president..

HANS NICHOLS, POLITICAL REPORTER, "AXIOS": Right.

MATTINGLY: Like Sarah. People like Cassidy. Cabinet officials. Senior adviser. Legal counsel. Across the board, people who work with him inside that building, for the most part, say the same thing that Cassidy Hutchinson is saying. NICHOLS: Right.

MATTINGLY: And yet the actual elected officials inside the Republican Party made a decision - made a decision in the weeks after January 6th that we're going to stick with him. Why?

NICHOLS: And they -- well, they reupped that decision in the debate, right, when they had the hand raised.

I don't have an answer for that, other than the fact that they are reading their party and they might be reading their party in a different way that Errol was reading.

And it's interesting to listen to Cassidy Hutchinson talk about, yes, I still consider myself a Republican. You and I know dozens of people like this that are of a younger generation or even older generation, sort of Paul Ryan type Republicans. None of them seem terribly optimistic about their ability to fight and win for control of their party and take it in a different direction. And I think we heard that from - it wasn't so much resignation, but it came close to it from Cassidy Hutchinson. And that's what will be interesting on the debate tonight.

Now, I don't suspect Cassidy Hutchinson is going to be a question tonight on the debate. There are a lot of important questions we just saw with the news from North Korea. Foreign policy can come in at any moment (INAUDIBLE) at the Reagan Center. There will be important, big questions there. But I don't suspect that we'll really see any of those announced, down to seven on the stage, sort of throw Donald Trump and really -- aside from Chris Christie -- really have the conversation that I think a lot of us at this table want to have here, which is, when is the Republican Party going to have this fight. But it doesn't seem like it's going to be tonight.

HARLOW: Are they even going to have to fight.

NICHOLS: Yes.

HARLOW: Errol, I want to turn people's attention to something that may not get a lot of headlines but it really matters. The Supreme Court, yesterday, wrist slapped this Republican-led effort in Alabama again for a second time to essentially cut out what needed to be a second majority black voting district in the state, which matters a lot for the makeup of the next house.

LOUIS: Yes.

HARLOW: Explain what the Supreme Court did, a conservative court, and why it matters.

LOUIS: Yes, no, it's really important. Look, 27 percent of Alabama is black. They have one seat out of seven that is reliably electing African Americans to the Congress. Even this conservative Supreme Court has said, you've gone too far, you can't do this. There is something left of the Voting Rights Act of 1965 and you've got to do this again. The state has defiantly, you know, they said, OK, we'll redraw it. And

then they regrew it and essentially handed in the same map. That level of defiance of a Supreme Court directive is very unusual. A special master has been appointed. They're going to sort of continue this fight. But what it tells us is, ten years after the Supreme Court struck down some of the provisions of the Voting Rights Act that were intended to prevent this kind of nonsense down at the state level, you're playing whack-a-mole all over the country. They have really sort of emboldened a lot of these state legislatures to do exactly what they've done, which is try to dilute black voting strength. And in a Congress that is so closely divided, with only a few seats between Democratic or Republican control, all of this really matters.

HARLOW: This will likely mean, as Joan Biskupic reported yesterday, one more Democratic seat in the House.

LOUIS: Yes. And then you have to move on to, you know, to Georgia and Virginia and to all kinds of other places where there are these rules changes, lines drawn, voter I.D. laws and other kinds of voter dilution strategies that are going to be finding their way through the court.

MATTINGLY: Sarah, I want to ask you, Hans front ran (ph) me, as he always did when we were colleagues at "Bloomberg." On the debate, when you watch tonight, I think it's easy, and I'm probably guilty of this of saying, I don't know that this necessarily matters in the grand scheme of things given where Trump stands in this race right now, what are you watching for and what do you think could break through?

[06:40:03]

MATTHEWS: So, obviously, Trump isn't going to be there. And so that does provide someone on stage an opportunity to have a breakout moment.

I think in the first debate, I think Nikki Haley had the breakout moment. And she gave the most substantive policy answers. Vivek Ramaswamy also got a lot of headlines because I think people were going after him. And I expect that to continue on tonight's debate stage. And he's an easy target because you can draw a clear contrast with him. People can say look how inexperienced he is. I have experience on x, y, z.

But I think that in the first debate Nikki really shined and her polling numbers have gone up. And we saw in a recent NBC poll that in a head to head match-up between her and Joe Biden, she beats Biden in a general election by five points. So, I would expect her to be a target tonight on stage as well. And I'm curious if she can keep that momentum up.

But it's going to be hard because until the field narrows, I don't think anyone can effectively challenge Donald Trump for the nomination.

NICHOLS: Yes, I don't have anything to say to that, right. I mean look at the -- look at the delta, look at the gap between - MATTINGLY: I haven't brought you in.

NICHOLS: Yes. Yes, I -

MATTINGLY: (INAUDIBLE).

NICHOLS: Well, look, here's my - here's my solution. That is, the one thing about Mark Meadows, to go back to that conversation, he didn't know what a white claw was? That's an incredible - like, so here's the - here's the suggestion for the debate, and that is that you just have everyone put white claws out there and see if they actually notice and that could - that could -

HARLOW: Nice - nice free branding.

NICHOLS: Yes. Right. Right. That's right.

MATTINGLY: This is good. Just like that, (INAUDIBLE), this is like a thing.

NICHOLS: That's like (INAUDIBLE). Maybe I had one this morning.

Look, the delta matters. And the polling matters here. And you just see - and normally you don't look at polls this far out. But look at how stuck the race is. And whether or not Trump's at 57 or 48, he still has just this gap that's going to be impossible to close. And all of the - you know, I don't want to say undercard, but the lower tier candidates, they're all fighting within, you know, neck and neck. We're talking about a difference between whether (ph) or not you're seven or nine points. Awfully tough to hang your campaign on, like, I moved from seven to nine. So -

HARLOW: Right. I think you just brought Hans here to side with you in the Avalon ongoing bet. Is that correct?

MATTINGLY: Yes. I'm building momentum in a bet that I hope gets me a really expensive steak dinner in New York City.

HARLOW: Yes, noticed that. Is that the - (INAUDIBLE).

MATTINGLY: We haven't decided yet. Avalon knows this town. I don't.

HARLOW: Thank you. Nice to have you.

MATTINGLY: Thank you, Sarah, Errol, Hans. Guys, appreciate it.

HARLOW: Come back, Hans. Thank you, everyone.

MATTINGLY: Well, Hollywood's writers are returning to work for the first time in nearly five months. We'll bring you the latest on what this means for your winter binge watching. That's next.

HARLOW: One of America's most powerful CEO with a stark warning on inflation, interest rates. That's ahead. The president of the Minneapolis Federal Reserve, Neel Kashkari, in studio with us.

(COMMERCIAL BREAK)

[06:46:07]

MATTINGLY: Well, brand new this morning, it's official, Hollywood writers are now allowed to return to work. The strike officially ended as of 3:00 a.m. Eastern this morning after the board of the Writers Guild of America unanimously voted to give its members permission to go back to work. But union members could still refuse to ratify the tentative agreement reached with studios and streaming services when they vote next week.

CNN's Natasha Chen joins us live from Natasha (ph).

Natasha, we're starting to get a little bit more insight into the deal itself. What's the latest state of play as writers can now go back to work?

NATASHA CHEN, CNN CORRESPONDENT: Well, Phil, the writers I've spoken to are very excited about this. There's a general mood of optimism here. They feel like there was something in this deal for everyone. So, let's walk through what's in it.

Basically, we start with better pay. Five percent more this year, followed by 4 percent next year, 3.5 percent the year after that. Better benefits, which includes a slight increase in health fund contribution. And writers who are on the same script no longer have to share the cap on that pension and health benefit contribution.

This was a big sticking point, artificial intelligence. There are some protections against the studio's use of that. A studio can't use AI to write or rewrite literary material. They have to disclose to a writer if they're handing them anything that's been done with AI. And a writer can choose to use AI with consent from the company, but can't be forced to use it.

Another big sticking point, streaming bonuses and residuals. This is going to be based on the success of the content and how many people view it on streaming platforms. In some cases, on the largest platforms with really big budget productions, this could mean an extra $9,000 bonus on a half hour episode, up to more than $40,000 bonus on a huge feature movie.

And here's a writer we spoke to on the picket line yesterday talking just about this.

(BEGIN VIDEO CLIP)

CYLIN BUSBY, WGA MEMBER: Streaming has just restructured our whole payment for our writing. And just needing some parameters around that, some rules around how we, as writers, are getting paid for our content, the things that we create in our heads and Netflix puts on streaming. There is - it's a new model. And so we just need to make sure people are being fairly compensated for that. That's what's most important to me.

(END VIDEO CLIP) CHEN: She also talked about how not a whole lot can get restarted without the actors also on production sets. So, they need -- all of this industry needs for the actors to also get back to the table with studios. SAG-AFTRA released a tweet yesterday saying that at this time they have no confirmed dates scheduled to meet with the studios. But when they have that confirmed, they will inform you. They said unless you hear from them, they said, it's hearsay. So, a lot of people very optimistic, but still hanging on for those actors to also negotiate with studios, Phil.

MATTINGLY: We'll keep an eye on that.

Natasha Chen for us. Thank you.

HARLOW: All right, so the war on inflation could get worse before it gets better. JP Morgan's CEO Jamie Dimon warning interest rates could go up, maybe way up, to cool inflation. If that happens, it will be painful. This is what he said in an interview, quote, "I'm not sure if the world is prepared for 7 percent, I ask people in business, are you prepared for something like 7 percent. The worst case is 7 percent with stagflation."

Since early last year, the Fed has rapidly raised interest rates from near zero to just over 5 percent. Last week Fed officials released projections that pencil in just one more rate hike this year before rate cuts maybe next year. And the Fed's moves are starting to hit American's finances. Think about this, buying a home or a car right now, much harder. According to Mark Zandi from Moody's, when you mix higher borrowing costs with high prices, "The Wall Street Journal" puts it this way, that Zandi "estimates that the typical American household would need to use 42 weeks of income just to buy a new car, as of August, up from 33 weeks a year ago.

[06:50:09]

The National Association of Realtors calculates that the typical American family cannot afford for buy a median-priced home."

Joining us now, one of the 12 Fed officials with a vote this year on interest rates, president of the Minneapolis Fed, Neel Kashkari.

Good morning.

NEEL KASHKARI, PRESIDENT, MINNEAPOLIS FEDERAL RESERVE: Good morning, Poppy.

HARLOW: I was struck seeing Jamie Dimon. He chooses his words carefully on things like this. You have said you see a 40 percent chance of, quote, "meaningful higher rates." Is 7 percent possible enough that Americans should prepare for it?

KASHKARI: You know, it's hard to prepare for it. I would say for everybody it is. For businesses and for individuals.

One of the big surprises for us over this year is how resilient the economy has been. As you said, we've raised interest rates a lot over the past couple years and yet the economy has continued to be quite strong and American households have continued to spend more than we expected. So, that's good news that there's that resilience in the economy. But if our interest rate increases are not slowing the economy the way that we expect, then there is that risk that we might have to go higher than we currently realize.

HARLOW: That much higher? That's 2 percent higher.

KASHKARI: You know, it's hard to know. It's hard to know.

HARLOW: But that sounds like Americans at home should prepare for it. I mean Jamie invoked Warren Buffett's famous saying, when the tide goes out, that's when you know - you know, who's been swimming naked. And he equates 2 percent more to the tide going out. And then, if Americans don't prepare, they are stuck.

KASHKARI: Yes, it's - you know, but again, though, it is tough. It's like, what do you say to a family to say, well, how should you change your behavior if you think that higher interest rates may be coming.

HARLOW: Can you speak to that? What should they do?

KASHKARI: It's, don't take on more debt right now, you know, would be a big thing. Credit card interest rates have gone up quite a bit. And if you have bigger balances, then it's going to be more and more painful to service those debts.

And to the extent possible, have longer term -- if you have loans, longer term home loans are better, less sensitive than shorter term home loans. It's - it's a tough thing to deal with.

HARLOW: Isn't one thing we're not even factoring in yet, sort of the quadruple whammy here. We already have an auto shutdown. It looks like we're going to have a government shutdown. Student loan repayments, that's a ton of money, that starts again October 1st, and oil prices. Gas is really high. Those are four things that aren't even factored in yet.

KASHKARI: Yes. The oil prices, you know, people are already feeling it on the pump because gas prices - and that - that affects families all across the country right away. So that is a real factor. The other ones are also real as well.

When we've analyzed these in the past, I mean, I'm not hoping for a government shutdown. I want to see the government stay open. Historically, they've been quite short. So, they have not seen a big effect in the macroeconomy. Same thing with the student loans. If you just analyze the student loan payments, it can be very painful for an individual family to deal with. If you look at it across the scale of the U.S. economy, it doesn't seem like, by itself, it will have a big effect on the U.S. economy. But if all four happen at the same time, then all of a sudden that starts really adding up.

HARLOW: But that's really likely that all four are going to happen at the same time. So, can you translate what that's going to means for folks? KASHKARI: Well, again, it's going to go back to the auto strikes that

have happened in the past typically have been short lived. If it goes on for a long period of time, that's going to have a much bigger imprint. Same thing with the government shutdown. So, at the Fed, we have to take all of these scenarios and try to figure out, what would we do if these various scenarios happen. And we run different analysis all the time to look at it.

HARLOW: If they happen, is it possible that to achieve a soft landing, you said 60 percent chance of a soft landing, but you also pointed out inflation proves more entrenched than expected. Is it possible the - you guys have to say, our target can't be 2 percent inflation anymore. We've got to say 3 percent, for example. So -

KASHKARI: No. No.

HARLOW: No?

KASHKARI: We are committed to 2 percent inflation.

HARLOW: OK.

KASHKARI: We can achieve 2 percent inflation.

The question is, if these -- we call these things shocks. If these downside scenarios hit the U.S. economy, we might then have to do less with our monetary policy to bring inflation back down to 2 percent because the government shutdown or the auto strike may slow the economy for us. I'm not hoping for that, but those are -

HARLOW: That's interesting.

KASHKARI: There's an interaction there.

HARLOW: It could have that effect that you guys need on - OK, I have to end on this. If, yes, shutdowns are normally short, but the last one we saw, 34 days, longest in history. It shaved off 2 percent for the U.S. economy for the first part of 2019. If this goes on, if it shuts down and goes on for more than two weeks, you guys at the Fed do not have some of the data you need. You don't have the government produced data on the labor market or the inflation. So how on earth do you decide what to do with interest rates if you literally don't have the data?

KASHKARI: Well, we look at a wide range of data. We want all the data we can get. We so count on the government data. But we also look at private sector forecasts and private sector payroll -

HARLOW: ADP, et cetera.

KASHKARI: For example. So, we will be able to make our decisions.

I am more worried about the individual families who won't get the checks, the Social Security checks, all of the other things that Americans count on. That's, to me, a much bigger factor of consequence of a government shutdown. HARLOW: OK, Neel Kashkari, president of the Minneapolis Fed, thanks

very much for your time.

KASHKARI: Thank you very much. Good to see you.

[06:55:00]

HARLOW: You got it.

Phil.

MATTINGLY: Well, an arrest warrant is out for the murder of a young tech CEO in Baltimore. What police are saying about her alleged killer and why he remains so dangerous.

HARLOW: Also, this breaking news just in to CNN. North Korea says it has decided to expel U.S. Army Private Travis King, who had crossed into the North from South Korea in July. Those breaking details ahead.

(COMMERCIAL BREAK)

MATTINGLY: Well, this morning, a manhunt is underway in Baltimore for a convicted sex offender now wanted on multiple charges, including first-degree murder after tech CEO Pava LaPere was found dead from blunt force trauma in a downtown apartment on Monday. Police say they're looking for 32-year-old Jason Dean Billingsley, who's considered armed and dangerous.

(BEGIN VIDEO CLIP)

RICHARD WORLEY, COMMISSIONER, BALTIMORE POLICE DEPARTMENT: Every single police officer in Baltimore City, the state of Maryland, as well as the U.S. Marshals, are looking for you. We will find you.

(END VIDEO CLIP)

MATTINGLY: CNN's Omar Jimenez joins us now.

And, Omar, Baltimore police haven't said how they identified Billingsley as the suspect. What do we know at this point?

OMAR JIMENEZ, CNN CORRESPONDENT: Yes, at this point they just say that he is the one that they need to get right now. They consider him extremely dangerous at this point. He's expected of killing 26-year- old Baltimore tech CEO Pava LaPere. She was just named to the Forbes "30 Under 30" list for social impact, in part for her company, EcoMap. But he's suspected, as we understand, of killing LaPere. She was initially reported missing Monday morning. But then later, hours later, was found dead by police due to blunt force trauma.

And this is something -- this is someone, the 32-year-old Jason Billingsley, that has a history. He pleaded guilty of assaults back in 2009 and 2011 and then pleaded guilty to a first degree sex offense in 2015, was sentenced to 30 years in prison but then was released in October 2022. We're still confirming exactly as to why. But it still seemed to catch some Baltimore officials by surprise when this happened. And it's part of why police say that he is not only armed and dangerous, but has the capacity to act.

Take a listen.

(BEGIN VIDEO CLIP)

RICHARD WORLEY, COMMISSIONER, BALTIMORE POLICE DEPARTMENT: Be aware of your surroundings at all time. This individual will kill and he will rape. He will do anything he can to cause harm. So please be aware of your surroundings.

(END VIDEO CLIP)

JIMENEZ: Now, Baltimore Police also believe he's a suspect in another case but haven't elaborated on why. Baltimore Mayor Brandon Scott did say that Pava LaPere was someone he got to know over the years and said that she was someone that would never hesitate to help. But, of course, this is a case that has shaken the Baltimore community, not just those in the tech scene as well.

MATTINGLY: All right, Omar Jimenez, keep us posted as you learn more. Thank you.

JIMENEZ: Of course.

MATTINGLY: And CNN THIS MORNING continues right now.

ANNOUNCER: This is CNN breaking news.

HARLOW: We begin this hour with breaking news.

Just in to CNN, North Korean state run media reporting it has decided to expel U.S. Army Private Travis King after completing their investigation into his crossing into the North from South Korea.

[07:00:07]