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Fed Expected to Hold Rates Steady; Trump PAC Pays Legal Expenses; Chita Rivera Dies at 91. Aired 6:30-7a ET

Aired January 31, 2024 - 06:30   ET

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

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[06:32:36]

POPPY HARLOW, CNN ANCHOR: Welcome back.

Well, this morning, the president of Europe's central bank is warning what a second Trump presidency could mean abroad. Here is Christine Lagarde. She sat down with our very own Richard Quest.

(BEGIN VIDEO CLIP)

RICHARD QUEST, CNN ANCHOR: I've read your words on what you said about the election of Donald Trump.

CHRISTINE LAGARDE, EUROPEAN CENTRAL BANK PRESIDENT: Uh-huh.

QUEST: Very carefully.

LAGARDE: Uh-huh.

QUEST: And at one level it's an impeachable, pardon the phrase, in the sense that you were merely stating your vision (ph) if he's elected. He has a range of policies that would be very difficult for the European values. But the fact that you said it, the mere fact that you said it, where most people are running for the hills to say nothing controversial. Do you regret saying that?

LAGARDE: No, I don't.

QUEST: Is he that much of a threat to European values?

LAGARDE: I don't because, you know, I -- first of all, I think that being constantly politically correctly and perfect in that respect is a risk of not seeing the reality and preparing for it. And I think that if you look at what those years were when Trump -- when Mr. Trump was president of the United States, looking at his program now shouldn't prevent you from understanding that there could be threats and there could be issues for which the Europeans should be prepared.

QUEST: What happened four years ago, or during the last Trump administration, with the question of tariffs, with the saber rattling. They -- I mean you are really saying -- if I understand you, don't be surprised if it happens again. Certainly not now. We've been warned. LAGARDE: That's correct. And, therefore, let us prepare for that. Let

us prepare for potential tariffs, for potential harsh decisions that would be unexpected. So let us be strong at home.

(END VIDEO CLIP)

PHIL MATTINGLY, CNN ANCHOR: Can I -- before we move on, can I quickly ask you, you keyed on this interview. And for those of us who have covered business for years, you know Christine Lagarde and you know her role in financial markets. But why -- explain to people her kind of role and presence and why what she says matters so much.

HARLOW: Because she speaks more candidly than almost anyone in that position. Because Richard was able to drag the sort of truth out of her. And because it's very much a reality.

I think before Trump was elected the first time, these were threats. And then when he was president, you saw what that actually could mean. And now she's saying, this could likely happen if he wins again.

[06:35:03]

Be prepared for it. Sort of, shore up, we have time to prepare for it. But even this weekend "The Washington Post" reporting on Trump telling some in his inner circle that he would be open to 60 percent tariffs on goods from China. People need to understand what that actually means at home for you, for your budget, for your wallet, and what that would mean for the broader economy. So, I think she's saying, believe it when you hear it.

MATTINGLY: And also she's saying what we know people are saying behind the scenes. She's just one of the few to actually say it out loud. It's a fascinating interview.

HARLOW: Yes.

MATTINGLY: Our thanks to Richard Quest for that.

Well, today, the Federal Reserve will hold their first interest rate meeting of the new year and they're expected to keep things steady for the moment. Right now interest rates are at a 23 year high. Two years of rising rates have helped the broader U.S. economy get on a stronger footing. Inflation has slowed. The job market has remained robust.

HARLOW: Federal Reserve signaling cuts, maybe four, five cuts this year. We'll see. They're trying to temper expectations about when that would happen. Fed Governor Christopher Waller said earlier this month that he sees, quote, "no reason to move as quickly or cut as rapidly in the past." What does that actually mean?

CNN economic commentator and "Washington Post" opinion columnist Catherine Rampell.

If anyone knows what that means, you know what that means. Talk to us about the significance of the Fed, this first meeting, and what it means for everyone at home. CATHERINE RAMPELL, CNN ECONOMIC COMMENTATOR: Sure. So, the Fed is

meeting today, or has been meeting actually the last couple of days, as you note. And everybody wants to know what they're looking at. And what they're looking at is the same data everybody else is examining, the state of the economy.

And the real question is, how hot, or cold, is the economy today. And there's some conflicting data on that. So, the kinds of things they'll be considering, what's happening to prices. Obviously on lots of consumer's minds. What's happening to other broader measures of economic activity. GDP, for example, has been stunningly strong the last couple of quarters, beating expectations. And, of course, what's happening to the job market. Which, as Phil mentioned, has really held up.

So, let's dig into some of those numbers.

So, on inflation, this is the -- a chart of the Fed's preferred measure of inflation. It strips out energy and food prices. I know that matters to consumers, but for the purposes of the Fed, those are pretty volatile. They want to see the underlying numbers. And you can see, it's come down quite a lot. It's still above where it -- where the Fed would like it to be. Their target rate is around here. And we're still a little bit above that, even if we've come down quite a bit.

And then beyond that, looking at the job market, here's some data that came out yesterday. It's a different measure of the job market, looking at how many jobless workers there are per job opening. So, it's a ratio. And you can see it's very low. There are fewer than one worker available per vacancy in the United States. That's close to historic lows here.

Again, a sign of a hot economy rather than one that potentially needs to be stimulated through interest rate cuts.

MATTINGLY: Catherine, Jay Powell is considered one of the more candid Fed chairs, which is a very low bar.

HARLOW: True.

RAMPELL: Yes, their job is to never make news. To be as boring as possible.

MATTINGLY: To receive - to - right, exactly. So, what -- what are you expecting? And I think, more importantly, when or if the Fed does cut rates, what is that going to mean for consumers?

RAMPELL: Sure. So, let's talk a little bit about what to expect today.

So, Jay Powell is going to be talking today. They're releasing a statement. And the real question is, are they going to cut rates today? And if you look at where markets are placing these odds, they do not think it's going to happen today. So, this is where the - where markets are today. You know, 98 percent chance there is no change. However, as you pointed out, the Fed has signaled it may start cutting

rates at some point this year. A lot of market participants think, you know, there's a pretty decent chance that they'll start cutting as soon as March. You know, 40 percent chance or so. And so they will be paying very careful attention to what's in that statement. Any tiny tweak of verbiage in that statement to indicate their timing, as well as the press conference that happens later today at 2:30 when Chairman Powell will be taking questions from journalists about how he's viewing the state of play and how he views the economy.

And now the question about what this means for consumers is a great one. So, interest rates, what the Fed controls has a lot of knock-on effects for other consumer products. So, things like the price of your mortgage. If the Fed cuts rates, you might expect that that will feed into mortgage rates, 30 year mortgages, as well as car loans. Car loans again also benchmarked against the Fed's funds rate.

And then you also have things like credit card interest rates. Those will be affected as well.

MATTINGLY: Catherine, I know this is an odd demand, but can you pull up the Jay Powell picture again because I think that really underscores the effusive nature of his pros.

[06:40:06]

Yes, that's - that -- you're reading him perfectly right there.

RAMPELL: I know.

MATTINGLY: We have no idea what he's going to say.

Catherine Rampell, we --

RAMPELL: I think I told the - I think I told the producer, can you get a photo of Jay Powell looking cryptic. And I think that's probably every photo of Jay Powell.

MATTINGLY: Yes, that's - nailed it. Totally nailed it.

RAMPELL: Yes.

MATTINGLY: Catherine Rampell, as always, we appreciate it.

Well, former President Trump says Nikki Haley has no path to the Republican nomination because she lacks MAGA support. Next, how Nikki Haley is putting a twist on Trump's slogan, MANA, make America normal again.

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HARLOW: Welcome back.

Political action committees supporting Trump spent about $50 million on his legal bills last year. Remember, those -- that's not Trump's money. MATTINGLY: No, donor's.

HARLOW: That's donor's money.

[06:45:01]

This is according to sources familiar with the matter. That is a lot of money. I don't have to tell you that. It would normally be used to promote a candidate through their political campaign. But as "The New York Times" points out, it's about what Nikki Haley's PAC raised in total last year.

MATTINGLY: Now, Haley took the opportunity to go after Trump, posting on social media, quote, "another reason Donald Trump won't debate me, his PAC spends $50 million in campaign dollars on legal fees. You can't beat Joe Biden if he's spending all his time and money on court cases and chaos."

Now, according to Reuters, aerospace mogul Robert Bigelow says he gave Trump $1 million for his legal fees and promised to give his affiliated super PACs $20 million on top of that.

Now, both Haley and Trump are on a push to court more contributions from mega donors.

HARLOW: Back with us, Lee Carter, Chris Whipple, Basil Smikle.

The number, Chris, is astonishing. We'll know from the FEC fillings exactly what it was later today. And it's nowhere near the end.

CHRIS WHIPPLE, AUTHOR, "THE FIGHT OF HIS LIFE: INSIDE JOE BIDEN'S WHITE HOUSE": Yes.

HARLOW: I mean he's got all these ongoing investigations. He's going to appear the E. Jean Carroll decision.

Nikki Haley says, you know, this is another reason why he can't win. But this - we've proved that these cases just help him raise more money.

WHIPPLE: Well, look, when it comes to money, obviously you'd much rather be Joe Biden than Trump. I mean he - he's paying $83 million or will pay $83 million to E. Jean Carroll. There would be upwards of $350 million in New York.

But, at the end of the day, you know, I think there's going to be -- this is inside baseball. I think at the end of the day there's going to be more than enough money to go around. They're going to spend, Trump and Biden, who are going to be the nominees, are going to spend way upwards of a billion dollars on the campaign.

I think, you know, the -- the bigger challenge, especially for Joe Biden, is to figure out exactly what he's campaigning on. I mean, to -- I wrote an op-ed the other day arguing that he hasn't clearly defined why he's running for a second term. And I think he -- I think he needs to do two things. I -- he has to campaign in poetry and pros. The poetry is spelling out in no uncertain terms the threat to democracy that Donald Trump unquestionably poses.

But the pros is reaching people where they are, around the kitchen table. And Biden is potentially terrific at that. And he -- we know he can do that. He hasn't done it so far. I find that kind of odd. But I think he needs not to talk about Bidenomics, which is a kind of wonky recitation of his achievements. He's got to talk about - he's got to be honest with voters who feel that prices are higher and say, look, I get it, prices are higher on a lot of stuff, and here's what I'm going to do to change that. Here's how we're going to do - here's how we're going to bring those prices down. Here's how far we've brought them down already. Just level with voters about what they're feeling in their pocketbooks and we can talk about all the other -- all the other issues as well. But I think that's just a really critical one.

MATTINGLY: Can I - can I follow up on that, though, just because your book in the -- on the administration, I read with great interest at the time because I was covering the White House, great frustration when you had stuff that I didn't know about. But you are so inside the building and inside his team. Your point that you don't know why he hasn't been able to do that yet, or why he hasn't necessarily done that yet. What's your sense as to why?

WHIPPLE: Well, it's early days, of course. And, as we all know, Jen O'Malley Dillon, who ran the 2020 campaign so successfully, and Mike Donilon, who is his message guy, are now over there and they've joined the campaign. And I think things are going to change.

I think there's a -- you know, every -- there's a certain -- in every incumbent re-election campaign there's a certain defensiveness, there's a certain -- you know, they're - they're - they're thin- skinned people over there. And I think there's a reluctance to really acknowledge, to be totally candid, about things like inflation. They don't want to talk about it.

But I think - I think in this case they're going to have to. And I think that -- I've talked to more than a dozen presidential campaign managers for my next book, which I'm working on now. They say that, look, especially in swing states, people can accept higher prices if they think you have a plan to bring them down.

MATTINGLY: Yes.

WHIPPLE: And I -- that's going to be really important.

HARLOW: Can we talk about Elmo in this context. And, Yes, I mean the red furry "Sesame Street" animal. Tweeted this -- animal?

MATTINGLY: Yes, we'll go with it.

HARLOW: Tweeted this, "Elmo, just checking in. How is everybody doing?" Biden had a response, basically an empathic response. Like, I get it, times are tough.

But the reason I bring this up in all seriousnessly (ph) is because this is the environment. The responses were unbelievable that people sent in, talking about how they're not doing well, many of them. What help they need.

[06:50:00]

What -- really reflecting the mental health crisis in this country. That's the environment Elmo elicited from people. The environment that these folks are running in. And that can often be very challenging for an incumbent, how people feel.

LEE CARTER, FORMER REPUBLICAN STRATEGIST AND POLLSTER: Especially when that incumbent says things like, things have never been better. The economy has never been better. It seems like you're completely out of touch with the experience of the American people, because the American people right now are saying things have never felt worse to them. Seventy-five percent of Americans are saying that the country is going in the wrong direction. They're feeling the pain of the economy. They're feeling the pain of inflation. They're feeling the pain of the immigration crisis. They're feeling the pain of, I mean, war everywhere that they turn. It's just a very difficult time.

And in this moment we need an empath (ph). So, it's refreshing when you see that moment somebody checks in, how are you? It's refreshing for people to feel connected because so much of what's going on in this country is because we feel completely disconnected from each other. We can behave so badly. We can rail on each other because we're -- there's a lack of connection. And these kinds of things I think are really refreshing and reminders that we're all humans and we're in this experience together.

WHIPPLE: And this is Biden's great strength. That's - that's the irony here.

MATTINGLY: That's kind of what I want to ask you about -

HARLOW: He is an empath.

MATTINGLY: The irony of this is - this is him, right?

WHIPPLE: Right.

MATTINGLY: If you talk to people in his inner circle, it's a very small inner circle, but those who have been with him for decades say, if you want somebody who's empathetic, who understands, who will sit, Basil, on the rope line for hours and listen to people's stories, it's Joe Biden.

BASIL SMIKLE, DEMOCRATIC STRATEGIST: Right.

MATTINGLY: So, where is the disconnect? Is there one?

SMIKLE: I do think there's a disconnect because as Lee and Chris have said, there's a lot of focus on the numbers and the metrics. But are you really tapping into the economic aspirations of Americans? Can I buy a house? Can I buy a car?

HARLOW: Housing is so expensive. SMIKLE: Right. And so when you're - particularly I - I teach at a

college campus. A lot of the young students are very concerned about their ability, even in a great job market, to be able to get a job that actually pays them a certain amount of money. You're trying to get an apartment in a city like New York --

HARLOW: Forget it.

SMIKLE: As a -- as a - as a young professional, you're - you're paying not 30 percent of your income, which is typical, you're 50 to 75 percent. So, I think that the - the empathy comes with not just trying to convince voters that the numbers are good but that your life can be better, which is what presidential campaigns are about. They're aspirational.

WHIPPLE: And I think that something else that Biden needs to do, particularly when it comes to young voters, tell me if I'm wrong, but Gaza is just a real problem. And, you know, last time I was at the White House talking to some senior advisers there, I was - I had just had breakfast with my son. And he told me that the only thing people under 30 are talking about is Gaza.

And I -- this could reach LBJ in 1968 proportions if the White House isn't careful about it because it's really a big issue. And I think that Biden, having had Israel's back on October 7th, he's in a perfect position to now say, enough. You know, to publicly denounce the near indiscriminate shelling of Gaza. And I think that's - that's going to be key for him.

MATTINGLY: It's something they're certainly aware of and how quickly they can end it is absolutely critical.

Lee, Basil, I hate when I hear you're having breakfast with senior advisers. That's always problematic.

HARLOW: And writing another book.

MATTINGLY: Working on another books. "Gatekeepers," by the way, was one - I've told you this before, I still have dog-eared pages from that book, which is absolutely excellent.

WHIPPLE: Appreciate it.

MATTINGLY: Appreciate your time, guys.

HARLOW: Thank you.

Ahead, more on the big breaking story overnight. House Republicans are now a step closer to impeaching Homeland Security Secretary Alejandro Mayorkas. We're live on Capitol Hill.

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[06:57:40]

MATTINGLY: Well, this morning, tributes are pouring in for the legendary Chita Rivera, who died peacefully in New York on Tuesday at the age of 91. Her long-time publicist confirmed the news. Critics have dubbed her the greatest musical theater dancer ever.

HARLOW: And for nearly seven decades she acted, sang and danced her way to ten Tony nominations, all while shattering barriers for Latina entertainers.

Our Elizabeth Wagmeister takes a look at her remarkable career.

(BEGIN VIDEOTAPE)

ELIZABETH WAGMEISTER, CNN ENTERTAINMENT CORRESPONDENT (voice over): Chita Rivera in "Kiss of the Spider Woman," one of two Tony-winning performances for the Broadway icon, who won a third for lifetime achievement. With a record ten Tony nominations, Rivera's career spanned decades.

CHITA RIVERA (singing): Come on babe, why don't we paint the town.

WAGMEISTER (voice over): In iconic productions like "Chicago" and "Bye Bye Birdie." "Chicago" becoming a celebrated film in 2002, earning Catherine Zeta-Jones an Oscar for playing the role pioneered by Rivera on stage in 1975. Zeta-Jones wrote on Instagram, "from dreaming of being you as a little girl, then meeting you and then being deeply connected to you. There will never, ever be anyone like you, Chita, ever. Dim the lights on Broadway."

RIVERA (singing): A boy like that kill your brother (ph).

WAGMEISTER (voice over): Rivera is perhaps best known for originating the Broadway role of Anita in "West Side Story," which won Oscars in 2022 for Ariana DeBose and in 1962 for Rita Moreno, who told CNN that "Chita Rivera is eternal." "We were sometimes mistaken for each other, which I always viewed as a badge of honor. She was the essence of Broadway."

Born in Washington, D.C., as Delores Conchita, Rivera began training as a ballerina at age nine. In her memoir she describes herself as two people.

RIVERA: Chita is, hello, how are you. It's so nice to be here. Delores is, what is it you want? It's a darker side. I believe that Delores is responsible for me having a career. She's the guts.

[06:59:59]

WAGMEISTER (voice over): Rivera, whose father was Puerto Rican, became a triple threat performer as an actor, singer and dancer, blazing a trail for other Latinas.