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U.S. Mortgage Rates Up After Three-Week Slide: What's Next?; Today: House Ethics Expected To Release Gaetz Report; Biden Reaffirms Commitment To Hostage Deal; Manchin Slams Democratic Party As He Leaves D.C. Aired 6:30-7a ET

Aired December 23, 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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[06:32:56]

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT-ELECT OF THE UNITED STATES: Together, we will deliver low taxes, low regulations, low energy costs, low interest rates, low inflation so that everyone can afford groceries, a car and a home. Common sense.

(END VIDEO CLIP)

RAHEL SOLOMON, CNN ANCHOR: And it's been a tough year in the housing market, how -- high prices, high mortgage rates, sluggish sales. President-elect Trump says he's going to change that. But the average rate on a standard 30-year fixed mortgage was 6.72 percent last week. That was up from the previous weeks 6.6 percent.

And here's the thing, rates are actually expected to stay higher than 6 percent over the next two years.

Joining us now is Rachel Siegel. She covers the economics of real estate and housing for "The Washington Post".

Rachel, great to have you.

RACHEL SIEGEL, ECONOMICS REPORTER, THE WASHINGTON POST: Good morning. Thanks for having me.

SOLOMON: Good morning.

So I think for those of us who are looking for a house and may have caught Fed Chair Powell's press conference last week, it wasn't the greatest news in terms of 2025, in terms of the outlook. I mean, what's ahead as far as what we can tell so far.

SIEGEL: And there's a bit of a two sided story here. On the one hand, Powell's message was that the economy is strong. They made progress on inflation. The job market is good. All of those are things that the fed wants to see. It also means that they are not in a huge rush to take pressure off of the economy. And that means that they are expecting to cut interest rates fewer times than they thought just a couple of months ago.

Right now, they have two interest rate cuts penciled in for 2025. That could change for any number of reasons, but we're going to see some pretty direct consequences there for the housing market as well, just because they're not going to be in a rush to lower those rates anytime soon.

SOLOMON: And for those looking to purchase a home, obviously part of the issue has been the lack of supply. And if you're in a home and you're locked in at 3 percent, some people even have sub 3 percent. Some lucky folks have the sub 3 percent. You know, there's not really much of an incentive to buy in this market unless you have to. What's the strategy in the New Year?

SIEGEL: You're referring to this thing called the lock in effect, where there's a huge part of the housing market that is essentially frozen up for the reasons that you just listed. There's a huge push, and this was a big debate during the election to build more houses.

[06:35:01]

But as you said, there just aren't enough houses to go around. And that can mean that people who really are still trying to get into the market next year are going to have to face this reality of rates that might feel higher than they're used to feeling. They're not historically astronomical, but they're also not the two 3 percent from early in the pandemic. I think the advice that I get from people that I'll call will say, you know, if you find the right house, buy it, don't necessarily fixate on the rate if you can afford it. And that's the key thing here.

Don't overextend yourself, but don't necessarily hold your breath for rates to crater the way we saw during a really serious emergency.

SOLOMON: Yeah, it's an interesting point you raised that 6 percent sort of historically is not really high. I think the issue is that if you remember a few years ago when rates were 3 percent, sort of relatively speaking, it feels really high and it is really high compared to -- compared to what we saw a few years ago.

Rachel, let me ask. Fed Chair Jerome Powell has said that he will not resign. He was very clear about that when asked. And legally, he doesn't have to. When asked if he would step aside, here's what he said. Take a listen.

(BEGIN VIDEO CLIP)

REPORTER: Some of the president-elect's advisers have suggested that you should resign. If he asked you to leave, would you go?

JEROME POWELL, CHAIRMAN, FEDERAL RESERVE: No.

REPORTER: Can you follow up on -- do you think that legally you're not required to leave?

POWELL: No. (END VIDEO CLIP)

SOLOMON: And, Rachel, that sort of went on. I mean, he was very, very clear. But Trump's promises in regulatory policy, like hefty tariffs, could make the job of the Fed pretty challenging, more challenging. And his term doesn't end until May of 2026. So how do you see this playing out?

SIEGEL: Well, there's one thing that President Trump has forgotten a bit when he's promising lower mortgage rates, which is that he doesn't set them. He doesn't set interest rate policies either.

There are actually a lot of home builders who are quite optimistic about his term. I talk to people all over the country who are excited about lighter regulations, what they think is going to be just a broader economic boom. But that just does not solely rest in President Trump's hands. He can try to build more houses, but he can't lower interest rates.

And we've also seen and I think what that clip represents is that Powell is not going to bend to what the president wants. We saw that in the first term. Its something that Powell has been extremely clear about. And for the time that he remains in office, he's going to see interest rate policy through based on all sorts of things in the economy with this longer run vision for what's best for the country.

SOLOMON: Rachel Siegel, good to have you. Thank you.

SIEGEL: Thank you.

SOLOMON: All right. Turning now to Capitol Hill. Though lawmakers have largely left to go home for the holidays, CNN has learned that the House Ethics Committee is set to release its report into former Congressman Matt Gaetz sometime today. The years-long probe investigated numerous allegations against Gaetz, including sexual misconduct with a minor and illicit drug use.

Gaetz, Trumps former attorney general pick denies all allegations, calling them a witch hunt. One of his former Republican colleagues giving CNN a glimpse last year into what we could hear.

(BEGIN VIDEO CLIP)

SEN. MARKWAYNE MULLIN (R-OK): As far as Matt Gaetz himself, you got to think about this guy. This is a guy that didn't have that -- the media didn't give the time of day to -- after he was accused of sleeping with an underage girl, and there's a reason why no one in the conference came and defended him, because we had all seen the videos he was showing on the house floor, that all of us had walked away of the girls that he had slept with. He bragged about how he would crush ED medicine and chase it with -- with an energy drink so he could go all night.

(END VIDEO CLIP)

SOLOMON: All right, let's bring back our panel. Isaac, let me start with you. This is obviously a reversal from the

committee to even release this report. Remind us how we got here, but also how significant these findings could be for Gaetz.

EDWARD-ISAAC DOVERE, CNN SENIOR REPORTER: Well, we got here from what Matt Gaetz has been accused of by a number of people in this long process that went to the House Ethics Committee. And then when he was nominated to be attorney general by Donald Trump, there was this question of whether that would stop the report from being released since he wasn't a current House member. A number of Republicans seemed like they were leaning toward doing that, especially if he was at the moment when it seemed like he was going to be going through a confirmation process.

But once he was removed from the nomination as attorney general and pulled back from that, and Trump pulled back from that, then that the idea of releasing the report gained some new life. Now, what will be in there? We will find out. But what we know is that Matt Gaetz himself, last week when CNN broke the news about the report being released, said that it. He said, look, I've sent money to women, some that I've dated, some that I haven't. He didn't specify what dating meant there.

He said that he'd womanized too much and drank too much and smoked too much when he was a younger man. When he says he doesn't live that life anymore, the time that he's referring to is when he was in Congress. Its not when he was in college or in high school.

So this is just recently, the last couple of years that this behavior was going on. And as that former colleague of his was saying when he was in the House, it was known that he was up to a lot of things because he would show videos and pictures to colleagues and to other people of what was going on.

[06:40:13]

So that's all that he's admitted to already. And now we don't know what more than that will be in this ethics report, but its certainly more than I think most people would expect would be part of the everyday life of a member of the House of Representatives.

SOLOMON: Yeah.

And again, were expecting that report sometime today. Annie, obviously, Gaetz is no longer Trump's pick for attorney general. That said, I mean, he was at one point. How do you see this report fitting into the larger conversation around Trumps cabinet picks?

ANNIE LINSKEY, REPORTER, THE WALL STREET JOURNAL: Well, look, this is a cabinet pick who, as you know, famously in Washington, presidents, one of their one of their cabinet picks is shot down. And so this is the first to be shot down. But I think that, you know, looking at what he's been accused of, it's -- he's -- it's, you know, having sex with girls and bragging about it.

And it's really reprehensible behavior at any age, whether he's, you know, in his 20s or 30s or just, you know, a few years ago. So I think that the sort of overall bipartisan disgust for this behavior is, is reasonable. And, you know, I think we'll be seeing what exactly what's in the report. But, you know, paying people to have sex with them. There is a word for that.

SOLOMON: Lance, let me get your take on -- we also heard from Gaetz at that conservative Turning Point USA conference yesterday where Trump also spoke. Take a listen to some of what he said.

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MATT GAETZ (R), FORMER U.S. REPRESENTATIVE: Some of you throughout this conference have even given me a few suggestions. My fellow Floridians have asked me to. eye the governor's mansion in Tallahassee, maybe special counsel to go after the insider trading for my former colleagues in Congress.

It seems I may not have had enough support in the United States Senate. Maybe I'll just run for Marco Rubio's vacant seat in the United States Senate and join some of those folks.

(END VIDEO CLIP)

SOLOMON: Lance, your reaction? I mean, would -- would running for Rubio's Senate seat be a good idea, given what we might see, expect to see in this report a little later today?

LANCE TROVER, FORMER SPOKESPERSON, DOUG BURGUM 2024 PRESIDENTIAL CAMPAIGN: I can't -- I'm not here to make predictions about what Matt Gaetz is going to do next. That's certainly up to him. If he wants to run for office, he's entitled to do it.

I just want to go back to this ethics thing real quick. And I just want to know he's denied criminal wrongdoing. And while acknowledging that some of his behavior wasn't quite appropriate probably for a member of Congress or anybody out there.

But my issue has always been and still remains with this ethics committee. I'm not sure why they wanted to release this report now for a former member of Congress. It has been their policy for 30 or 40 years to not release reports like this. And so I just kind of see it as just a means of maligning a former member right now, other than really serving any good purpose out there.

I know that the Justice Department had investigated some of this stuff and declined to prosecute him as well. So that's my issue. I think it just hurts the credibility of this committee in Congress.

SOLOMON: Do you think the American people shouldn't see it?

TROVER: I think if the ethics committee has a policy that has been in place for 30, 40 years of not releasing reports about former members of Congress, certainly if he were a sitting member of Congress, then that report could get released. If he were going for attorney general, then I could see an argument for that. So -- but if that's been their policy, I'm not sure why. If that's the

case, then they should just release all of the reports that are out there on every member that they've ever investigated over the course of the last several years.

SOLOMON: Okay. We'll leave it here. Panel. Thank you. Stand by.

Up next on CNN THIS MORNING: held captive for over a year, the father of one Israeli-American hostage joins me next with their hope this holiday season.

Plus, a child injured after drones begin falling out of the sky at a holiday light show. His mother, now speaking out.

And Donald Trump's second term beginning in less than one month. Why? One Democrat says that the freak out is not helpful.

(BEGIN VIDEO CLIP)

SEN. JOHN FETTERMAN (D-PA): If you're rooting against the president, you are rooting against the nation and I'm not ever going to be where I want a president to fail.

(END VIDEO CLIP)

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[06:48:46]

SOLOMON: Welcome back.

New this morning, several Israeli families of hostages have received signs of life from their loved ones held captive by Hamas in Gaza. That's according to the Hostages and Missing Families Forum.

Now, the forum would not disclose how or when families receive these signs of life. But the news does come as both Israeli negotiators and U.S. officials have said that they have seen progress toward reaching a hostage and ceasefire deal in Gaza.

Just last week, President Biden reaffirmed his commitment to getting a cease fire deal done.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: But I know this year's Hanukkah falls on the hearts that are still very heavy. It's the second Hanukkah since the horrors of October 7th. Over a thousand slaughtered, hundreds taken hostage, unspeakable sexual violence, and so much more. The trauma of that day and its aftermath is still raw and ongoing.

I've gotten over 100 hostages out, and I will not stop until I get every single one of them home.

(END VIDEO CLIP) SOLOMON: And joining us now is Jonathan Dekel-Chen. His son Sagui is currently being held hostage by Hamas.

Jonathan, appreciate you being here today. Good morning.

JONATHAN DEKEL-CHEN, FATHER OF HOSTAGE HELD BY HAMAS: Good morning. Thank you for having me.

SOLOMON: So how are you feeling on this morning with these renewed hopes of a deal?

[06:50:05]

DEKEL-CHEN: Well, you know, there's certainly a new kind of vibe in the air. And that's been going on for nearly three weeks now, or three weeks exactly since President Trump put out a statement demanding that the hostages be released. And, you know, for us families, though, it's just another day in hell. And because, you know, the days have passed and continue to go by and, you know, every day is there's -- there's even more danger for the well-being of our hostages that might still be alive and the recovery of those who have already been murdered by Hamas.

SOLOMON: Yeah. Do you have any new information on how your son might be doing?

DEKEL-CHEN: No, we do not. The last proof of life that we have is from over a year ago, when the first batch of hostages, over 100 hostages. President Biden mentioned that in his, in his words, just before, and when and when they came home over a year ago, we heard from a number of them that they had seen, but they saw other people as well from our kibbutz community and many of those have been murdered subsequently. So the fact that any hostage was known to be alive a year ago means very little right now.

SOLOMON: Fair enough.

Can you share with us what it has been like for you, for your family since October 7th? I mean, I know you said every day feels like hell and no one can understand what you're going through. But help us if you can.

DEKEL-CHEN: I'm sure and I'll try. It's hard to put into words, as you can imagine. Sagui grew up and we continue to live on a small community called kibbutz Nir Oz, on the border with Gaza. And you know, that day, our home was assaulted by a couple of hundred heavily armed terrorists, and perhaps up to a thousand looters destroyed our homes and traumatized those who did survive, were in a community of a little worry in a community of a little over 400 people, 59 of them were murdered that day, 79 were taken hostage.

We still have 29 hostages of the total 100 Israeli hostages who are still being held. Sagui has three little girls, one of whom he's never met. She was born two months after the massacre. She, her mom and her two sisters survived miraculously, you know, it's almost hard to believe that they survived that living hell that they experienced that day.

So we've been dislocated for the last year, kind of refugees in our own country. Unclear if ever will be able to go back to live in our home, which was more or less burnt to the ground the entire community.

So it's an everyday challenge to sort of do the basic things in life. And we're doing the best we can with our kids and grandkids. And in my case, in full knowledge that this madness, both for the families of the hostages and for the people of Gaza, could end tomorrow if Hamas and the Israeli government simply can get to yes on this agreement that's being negotiated.

SOLOMON: Yeah. And it appears that we are close. The closest we have been certainly since the last agreement.

Jonathan Dekel-Chen, we appreciate your time today. Thank you for helping us understand a little bit of what you have been through. We're thinking about you.

DEKEL-CHEN: Thank you.

SOLOMON: And 53 minutes past the hour.

Here's your morning roundup./

Drones are falling from the sky during a holiday light show in Florida. Video showing multiple drones colliding, then crashing down into the crowd watching below. A seven year old boy hit in the chest by a drone had to undergo open heart surgery, according to local reports.

(BEGIN VIDEO CLIP)

ADRIANA EDGERTON, SON INJURED BY FALLING DRONE: My daughter found my son on the floor unconscious blood coming out of his face no. And then it was just like the worst because not only is he laying there like, you know, the EMTs are trying to help, but he was losing consciousness. His heart beat kept stopping, he was stopping breathing.

(END VIDEO CLIP)

SOLOMON: The FAA says that it is now investigating.

A man accused of setting a woman on fire on a New York subway burning her to death is now in custody. Officials say that the man approached the victim, did not say a word, and then lit her clothes on fire Sunday morning.

Today, Luigi Mangione, the suspect in that fatal shooting of the UnitedHealthcare CEO, is expected to be arraigned in New York. The 26 year old is facing 11 counts, including first-degree murder and state terror charges.

[06:55:05]

He is also facing federal charges.

And a congresswoman from Texas is experiencing, quote, dementia issues. Republican Kay Granger's son is telling "The Dallas Morning News" that his mother now resides in a senior living facility. The 81- year-old representative has not voted in Congress since July.

As congressional Democrats prepare for a GOP controlled Washington next month, some prominent voices are hoping that the party charts a different course in the New Year. Outgoing independent senator Joe Manchin delivering this parting message about why he thinks some voters this November followed him in abandoning the Democratic Party.

(BEGIN VIDEO CLIP)

SEN. JOE MANCHIN (I-WV): I am not a Democrat in the form of what -- what the Democratic Party has turned itself into the national brand. Absolutely not. And they know that.

That's what I told them. I said, you ought to figure out how you lost somebody like me. The brand got so bad, the D brand has been so maligned from the standpoint of it's just -- it's toxic. And the Democratic Party, the Washington Democrats, have tried to mainstream the extreme.

(END VIDEO CLIP)

SOLOMON: All right. Our panel is back for the last time.

Annie, let me start with you. I mean, it was quite an interview. Manu did a great job. They covered a lot of ground. Manchin could not have been stronger in terms of how he feels about the Democratic Party, calling it toxic. Essentially saying they've lost their way.

Talk about a mic drop.

LINSKEY: Yeah, absolutely. I mean, I think Manchin, in some ways is channeling the frustration and the confusion that many actual Democrats. He's no longer a Democrat, but how many actual Democrats are feeling right now?

I mean, as Donna Brazile said in our newspaper today, if you ask ten Democrats what to do about the future and how to redefine the party, you're going to get at least 12 answers.

So this is like one of the main, you know, questions that Democrats are wrestling with. But many Democrats that I talked to say that they think that Trump is really going to be how their party is redefined. And the reaction to Trump, and they're saying that, look, in the next two years, were going to be looking at where, in their view, he overreaches and really playing on that.

And so in many ways, you know, Trump as he has since 2015, may be the answer for Democrats.

SOLOMON: Hyma, your thoughts to this and specifically Manchin's thoughts that they have taken sort of the more progressive parts of the party and tried to make it the mainstream part of the party or the mainstream part of the country. Your thoughts?

HYMA MOORE, FORMER CHIEF OF STAFF TO DNC CHAIR JAIME HARRISON: Look, I respect the senator a lot, but he's not the Democratic prize. I don't think he's a bellwether for -- for my party.

But look, a couple of things are happening. I think Annie's right. I think Donald Trump has been a galvanizing factor for Democrats for the last 8 or 9 years. And so you'll see that start to happen again.

But more importantly, when you look at what happened over the weekend in Congress and see the leadership that Hakeem Jeffries was able to display in spite of the gridlock that that Congress was under, almost shutting down the government under Republican leadership. And so I think there are a lot of things that were going to be able to do to rebuild this party. I do not believe that we have to run away from the policies that we present.

I do think we have to run toward voters. I do think we have to run toward what people care about most. The economy, obviously, was the big factor. If you look at Joe Biden's record, the economy has gotten better over the last four years, and we continue to get better as Donald Trump takes office.

But I don't think Manchin is correct about the party being toxic. I think the Democrats think they believe that they stand for people who are marginalized, people who can't speak for themselves. And I don't believe -- I don't believe Democrats will stop doing that. And they won't do it because Joe Manchin told them to.

SOLOMON: Lance, let me give you the last word. And we only have 60 seconds here. To be fair, Manchin -- I mean, he had some strong thoughts about the GOP, too. He said they haven't taken responsibility for the national debt. And he said they lack common sense on the issue of guns.

TROVER: "Politico" has a story out this morning where they did a big focus group, and in that focus group, they were Biden voters who switched to Trump or Biden voters who didn't vote in this election.

Consistently, time and again, it was because the Democratic Party has skewed so far left, and all these woke transgender issues and the like, that the American public is just not buying into. So, Hyma, I mean, that's fine. They can ignore Joe Manchin and say he's not the party.

They can ignore John Fetterman all they want because, I mean, and I get it. They want to let Trump derangement syndrome and now this Elon derangement syndrome kind of be their driving factor going forward. Then they should do that. But that didn't work out so well for them on November 5th.

And I would just point to their idea of moving this country forward in the last week. In their own words, been to get under Donald Trump's skin by calling Elon Musk the president. So I don't think that's what voters are looking for. "The Wall Street Journal" has a story out this morning that says a

blue state governor did a poll, 2 to 1 voters want people to work with Donald Trump. They want Democrats to work with Donald Trump. So that's -- it's going to be up to the Democrats. Far be it from me to give them any advice at this point.

SOLOMON: Isaac, we ran out of time. But great to have all of you. Thank you for being with us for the full hour.

It's been a pleasure to be with you as well. I'm Rahel Solomon.

"CNN NEWS CENTRAL" starts just about right now. I'll see you tomorrow.