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President Trump Weighs Military Intervention In Iran; Justice Department Opens Criminal Probe Into Fed Reserve Chairman. Aired 6- 6:30a ET

Aired January 12, 2026 - 06:00   ET

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

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[06:00:48]

AUDIE CORNISH, CNN ANCHOR: I'm Audie Cornish. "Fall in line or else," that's President Trump's warning at home and to the world. The administration is trying to clamp down on protests as hundreds more immigration officers are headed to Minneapolis.

(BEGIN VIDEO CLIP)

JACOB FREY, MINNEAPOLIS, MINNESOTA MAYOR: She's calling Minneapolis like this dystopian hellhole. You know, how many shootings we've had so far this year? Two, and one of them was ICE.

(END VIDEO CLIP)

CORNISH: In the meantime, payback, the Fed Chair who defied the president now on the retribution list.

(BEGIN VIDEO CLIP)

JEROME POWELL, FEDERAL RESERVE CHAIRMAN: This unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure.

(END VIDEO CLIP)

CORNISH: First, Venezuela, now Cuba, President Trump's message to the island nation.

And Tehran violently cracking down on protesters. President Trump's next big choice, should in America, first president intervene.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), U.S. PRESIDENT: We will hit them at levels that they've never been hit before.

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CORNISH: And where we begin potential military intervention. President Trump says he is monitoring protests in Iran and considering several options. Two officials tell CNN that includes striking the Iranian regime if the regime kills protesters.

Tehran is intensifying a very violent crackdown on anti-government protests. In the past 15 days, more than 500 protesters have been killed and 10,000 arrested. This morning, large crowds are gathering for Iran to support the regime. It comes as President Trump says Iranian leaders have called him to negotiate after he threatened to get involved.

(BEGIN VIDEO CLIP)

TRUMP: We're looking at it very seriously. The military is looking at it. And we're looking at some very strong options. We'll make a determination. Why would they do that? We'll consider things targets that they wouldn't believe. If they do that, we will hit them at levels that they've never been hit before. They won't even believe it. I have options that are so strong.

(END VIDEO CLIP)

CORNISH: CNN's Paula Hancocks joins me now. Paula, good morning. If you could give us a bit of an update about the response from Iran's regime to the president's warning.

PAULA HANCOCKS, CNN CORRESPONDENT: So, Audie, we've just heard from Iran's foreign minister, Abbas Araghchi. He was giving a televised meeting, basically, with foreign diplomats. And he has said that Iran is willing to negotiate with the United States as long as it was based on, quote, "mutual respect and interests."

Now, he was also at pains to say that what was happening in Iran, the situation was under control, with many terrorist operatives arrested. Now, this is certainly Tehran wanting to show that they have the upper hand, wanting to show that the situation is under control. But what we are still seeing is many people coming out onto the streets, calling for regime change, calling for the end of the -- the Islamic regime.

Now, what we have also seen is that death toll significantly rise in the hundreds now, according to human rights groups, although they do fear that it could be far higher, because that Internet blackout means that information sharing within the country and also to the outside world is increasingly difficult.

Now, we've also been seeing, and I should warn our viewers that this footage is disturbing. We have seen at one of the forensic medical centers in Tehran many people watching a monitor on the wall, which is basically showing the faces of the deceased.

From this footage, we can see there were at least 250 people deceased. The crowds watching this are people looking for their loved ones. A similar situation outside the building, where there are body bags on the sidewalk as people walk from one to the other to see if they can recognize the person that they are missing.

You hear on this video screams of anguish when they do recognize their loved ones. So, it is still a very desperate situation for protesters inside Iran, that Internet blackout obviously making it more difficult to be able to verify the numbers of those killed, injured and arrested. But certainly they are still coming out onto the streets.

Audie?

[06:05:16]

CORNISH: OK, that's CNN's Paula Hancocks. Thanks so much.

And now I want to bring in the group chat, Sara Fischer, CNN Senior Media Analyst and Senior Media Reporter at "Axios," Francesca Chambers, White House Correspondent for "USA Today" and Catherine Lucey, White House Correspondent for "Bloomberg News."

Sara, I'm going to come back to you. I got to ask these White House guys about what the White House means when they talk about options. Obviously, after the strikes on Iran, we know sort of they're willing to take military action. Catherine, can I start with you? What are one or two of the things the government is considering?

CATHERINE LUCEY, WHITE HOUSE CORRESPONDENT, BLOOMBERG NEWS: Yeah, we know they're looking at different options. The president's getting briefed. I think we need to see sort of how this week unfolds, what the president talks about. You saw him talk on the plane about strength. This really comes at a moment when the president is really trying to emphasize U.S. might, U.S. power in this region.

And so, I think a big piece of context here is how empowered he is feeling and how empowered the White House is feeling, especially after the Maduro operation.

(CROSSTALK)

CORNISH: Yeah, where Marco Rubio played such a big role.

LUCEY: Yeah.

CORNISH: Does anyone know what's going on with Iran? Who's the person considered at the forefront of the conversation in the White House about that?

FRANCESCA CHAMBERS, WHITE HOUSE CORRESPONDENT, USA TODAY: I mean, he is both the national security advisor and the secretary of state. And you're talking about the Internet blackouts. Notably, President Trump said he was going to talk to Elon Musk about that. Elon Musk is also meeting with Pete Hegseth this week. So, that's something to keep an eye on as well.

CORNISH: And to be clear for the audience, that's because the potential use of Starlink satellites to support protesters? Or what's the thinking?

SARA FISCHER, CNN SENIOR MEDIA ANALYST: Yes, they would be supporting not just the protesters, but the Internet infrastructure for the country. But the challenge is just because Elon Musk is going to put Starlink up doesn't naturally mean that protesters have access to social media sites. Now, Elon Musk can determine whether or not X, which in the past has

been a huge site for protests in the Middle East, will continue to support people in Iran. But all the other social media sites, there's not a lot of control. Also, the government can unilaterally block various HTML.

So, there's not much I think that Elon Musk can actually do to help get people access to the platforms that they need to give voice to this right now.

CHAMBERS: But that comes back to the broader question of what it is that President Trump specifically could do to be helpful here to support the people of Iran. Yesterday, you even had hawks like Lindsey Graham say that he doesn't want to see boots on the ground in Iran, that he wants to see the president do something that helps the protesters, but doesn't embolden the regime.

FISCHER: Yes, I'm glad you mentioned Lindsey Graham. Rand Paul, same thing --

CHAMBERS: Right.

FISCHER: -- went on "Fox" yesterday and said this is not the place of America right now to be putting bombs or boots on the ground and getting involved in a military way. You're starting to see this big rift in the America first MAGA world with some people supporting the president and a lot of hawks in the Congress saying no.

CHAMBERS: Well, I would expect it for Rand Paul to be fair though, because he's very for this, you know, this war powers --

(CROSSTALK)

CHAMBERS: -- restrictions. He was one of the Republicans who voted in favor of the measure to restrict the president's ability to strike in Venezuela again. But to your point, you know, the president is now hearing from not just Democrats, but Republicans who are also saying like this could have the opposite effect that you want it to if you bomb inside Iran.

CORNISH: I want to just --

LUCEY: -- with Trump that he always wants to emphasize his leverage --

CORNISH: Yeah.

LUCEY: -- that he's able to do, whether or not he takes those measures.

(CROSSTALK)

CORNISH: That's not clear yet. I mean, one thing I was curious about this comment about if protesters are killed, we just heard from Paula, there's body bags in the streets. The odds of a protester being killed are going to be quite high. That's -- I don't think that's some sort of red line, but what is the White House sort of, are there any other --

FISCHER: Well, it's confusing because domestically we have so many protesters who are coming out against domestic policy. I think about the protests in L.A. with the ICE immigration raids, and yet the president does not come out with military force necessarily saying we need to get involved and protect these protesters. Why is it that he needs to protect protesters abroad, but not the ones here?

CORNISH: Well, he's also calling the ones here terrorists. Interesting that you should bring this up.

I want to play for you some clips of the Trump administration over the weekend and how they were talking about the story in Minnesota, where an ICE officer shot a person who was on the scene. Let's play a bit of that.

(BEGIN VIDEO CLIP)

TRUMP: She was an agitator, probably a paid agitator.

J.D. VANCE (R), U.S. VICE PRESIDENT: This is classic terrorism. And we cannot say that when -- when a far-left fringe is inciting violence against our brave law enforcement officials, that we're no longer going to enforce the law.

KRISTI NOEM, U.S. SECRETARY OF HOMELAND SECURITY: If you look at what the definition of domestic terrorism is, it completely fits the situation on the ground.

CORNISH: It's interesting that this is the frame they are leading with. There's many other ways you could talk about this. Catherine, you're -- looks like you have a thought?

LUCEY: No, they're certainly leaning into this argument and making this argument immediately. And a lot of the criticism you're hearing from particularly Democrats and some of the Democrats in Minnesota is that they feel like this is a jump to -- jump to a conclusion, that there has not been a full investigation yet, that we haven't seen all the evidence yet, and there are concerns being raised that they are immediately going to this argument.

[06:10:14]

CORNISH: What do they get out of that?

FISCHER: What a weird argument because so much of this video is public. There have been so many of the ICE shooting. There have been so many videos that have been made public. "The New York Times" had a great interview with President Trump where they watched the video of this going down, and the president seemed to understand that this does not seem like somebody who was causing domestic terrorism.

CORNISH: Has that changed by the video that's come out since? There's more detail. I've heard people say, well, her wife on the scene was taunting the officers. What was happening before? FISCHER: What's the line between taunting and domestic terrorism? There's got to be a much greater distinction here. To come out and say that somebody deserved to die because they were taunting an ICE officer, I think that's -- the video does not support that the taunts were that wild, Audie.

CHAMBERS: So interestingly, Tom Homan, when he was on yesterday on "Meet the Press," he did not repeat that it was domestic terrorism.

CORNISH: Oh, he didn't.

CHAMBERS: No, he did not say that he was kicking it to the FBI, to DHS. He's been walking a more careful and finer line, saying that he wants to see the investigation play out. We heard him say that at the beginning. We heard him say that again yesterday. So, there hasn't been a completely unified response from even within the Trump administration to this situation.

CORNISH: Yeah. Although that's sort of an evergreen tweet. I feel like many issues.

You guys stay with me. We've got a lot to talk about this hour. We're actually going to come back to this in a bit. But we're going to talk about the criminal investigation opened into the head of the Federal Reserve, why he's calling this just plain political pressure and intimidation.

Plus, a U-Haul drives through a crowd of anti-Iran government protesters, what it had written on the side of the vehicle. And tensions remain high in Minneapolis. Now, more ICE agents are headed that way.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Well, I would like to see the evidence of what they say that they have done in my state. What I see is them harassing and terrorizing United States citizens and people who are here legally and lawfully.

(END VIDEO CLIP)

[06:16:45]

CORNISH: It's almost 15 minutes past the hour. Here are five things to know to get your day going. A U-Haul truck drove into a crowd of people at a protest in Los Angeles on Sunday.

So, a video of the incident shows that protesters are pulling the driver out of the truck before he was arrested. The protesters were rallying against the Iranian regime. A sign on the side of the truck read, "No Shah. No Regime. USA: Don't Repeat 1953. No Mullah." Police are investigating this incident.

And I want to give you an update on the Maryland mother who had been in ICE custody. We told you about her last month. Well, Dulce Consuelo Diaz Morales has been released after spending 25 days in ICE custody. Her attorney tells "CNN This Morning" that she was wrongfully detained despite providing Homeland Security with documents that they argue prove she's a U.S. citizen. DHS disputes the claim, and her case is still pending.

And the Smithsonian makes a quiet change in the National Portrait Gallery. It's removed the references to President Trump's two impeachments, which had been under his portrait. While the Smithsonian is not saying why the change was made, it does come after Trump ordered the museums to review all exhibits, to quote, "remove divisive or partisan narratives" before the 250th anniversary of the U.S., the celebrations this year.

And Mattel releases its first Barbie with autism. The doll comes with her pink noise-canceling headphones, a fidget spinner and a tablet. Mattel says the goal is to showcase some of the ways that people with autism process the world around them. And the new doll is part of the Fashionistas collection, which celebrates diversity and inclusion.

UNIDENTIFIED FEMALE: And the winner is "One Battle After Another."

CORNISH: "One Battle After Another" wins big at the Golden Globes, dominating the night with four awards, including best motion picture for a musical or comedy.

On the TV side, Netflix's "Adolescence" also won four prizes, the most of any TV show. Some stars last night used the moment to make a political statement wearing "Be Good" pins in honor of Renee Good, the woman killed by ICE in Minneapolis. And in protest of Trump's immigration crackdown.

And after the break on "CNN This Morning," American oil companies have a deal to work in Venezuela. But not all of them. Why President Trump wants to cut out Exxon.

Plus, is the criminal investigation into Jerome Powell the president's payback?

In the meantime, good morning, Philly. Sorry about the Eagles.

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[06:23:36]

TRUMP: We're thinking about bringing a gross incompetence, what's called gross incompetence lawsuit. It's gross incompetence against Powell. I'd love to fire him, but we're so close. You know, maybe -- but maybe I still might.

(END VIDEO CLIP)

CORNISH: So, weeks ago, the president was threatening to sue the Federal Reserve Chairman Jerome Powell for gross incompetence. Now, it seems the Justice Department is going further than that. Federal prosecutors opened a criminal probe into the Federal Reserve Chairman over the $2.5 billion renovation project at the Fed headquarters building in D.C., a project that the president actually toured with Powell back in July.

Now, in a taped statement on Sunday, the chairman says this probe has nothing to do with a building.

(BEGIN VIDEO CLIP)

POWELL: The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public rather than following the preferences of the president. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation.

(END VIDEO CLIP)

CORNISH: OK, group chat is back. Got to say, the markets did not love this. When we look at the "Wall Street Journal," they noted pretty quickly that doubt futures fell. And also there was a fleeing to parts of the market like bonds and things like that. The things that show we believe in the U.S., people said, we're out of here. I want to talk to you about the perception of this, because now this is a war of words.

[06:25:12]

FISCHER: Yes, so the "Wall Street" reaction is because they want consistency. And anytime you're threatening to fire the Fed chair, potentially bring in, you know, the rumor would be Kevin Hassett, who's President Trump's economic advisor, who clearly would be setting a policy based off of his relationship with Donald Trump. That's going to worry big business, because they can't necessarily do forecasts. They can't anticipate sales unless they have a clear understanding of where the interest rates are headed.

The other thing I'd say that's sort of rattling a lot of "Wall Street" right now is the housing market. So, much of what the Fed does in setting interest rates impacts housing, availability, labor. And so, this shakeup is going to have a huge ripple effect until we know what's happening.

And just to give folks some deadlines here, you know, Jay Powell's term ends in May, but his directorship ends in 2028. So this is, you know, even if he were to cut his term early as the Fed chair, you still have to figure out to what extent he'd be willing to stay on for the next three years.

CORNISH: Yeah, and you're raising the same question Reid Hoffman did, CEO, saying, question to all those who said Trump would be better for the economy is attacking the Fed's independence, what you had in mind. This was also unusual in that Powell spoke up.

FISCHER: Yeah.

CORNISH: OK, Powell released a video direct to camera where he is saying, I am being threatened because my policy doesn't align with what the president said. What are you guys hearing about how the White House wants to play this?

LUCEY: Well, yeah, Powell is definitely making this a fight. And we're reporting today at "Bloomberg" that some, at least some privately, some Trump advisors have been anxious about this, concerned about how it would impact the bond market and the markets. And also what this means for -- as Sara was talking about, what Powell will do next in, you know, his chairmanship ends, but his seat doesn't. And some people think he might dig in and stay. This could affect Trump's plans for the Fed.

CORNISH: I mean, the Fed is definitely preparing and bolstering its defenses. I mean, one of the things I had noticed last week is that the Fed board, including the Trump appointees, unanimously approved the reappointment of all the regional bank presidents. Like, they basically locked in some folks sort of in the infrastructure of the place.

CHAMBERS: Right, and it had seemed for a time that maybe the president was going to back off a little bit on Powell because his chairmanship does end in a few months. I mean, and he himself had said, well, you know, he'll still be here, but he won't be running it anymore. And then the president will likely be able to put in a personal ally of his atop of the Fed.

But you heard Democrats also last night pushing back on this and saying that this is, you know, not only another assault on the independence of the Federal Reserve, that this is in line with some of the actions we've seen the president take of prosecuting or trying to prosecute through the Department of Justice. His perceived political enemies, as we also saw the last week, the White House say that they're going to also be installing an assistant attorney general within the White House to look at alleged fraud. So, breaking down --

CORNISH: In other states, so basically --

CHAMBERS: In other states, in other states, right.

CORNISH: Yeah.

LUCEY: It's not just Democrats also who were raising concerns last night. We heard from Senator Tom Tillis, a Republican in the Senate, who was expressing concerns about what this means for the independence of the Fed.

CORNISH: Yeah, he was saying on X, I will oppose the confirmation of any nominee for the Fed, including the upcoming Fed chair vacancy until this legal matter is resolved. So, he's kind of saying, go ahead and investigate him. You're not going to get to move much further.

CHAMBERS: Glad you pointed out, though, that he's a retiring senator because what we have seen this year, as we're talking about some of these divisions of the Republican Party, is more of the retiring senators who are speaking out against things that they don't like that the president's doing.

FISCHER: I just want to say quickly, the timing matters here. We've got midterms coming up. I think President Trump was looking to see, would the Fed cut rates ahead of the midterms, which would help him?

CORNISH: Right.

FISCHER: And now that it seems that they're moving slower than he would like, he wants to get ahead of it politically.

CORNISH: All right, we're going to end the segment with this. I want you guys to hear one more thing that Powell had to say about integrity. And this was at the end of his statement.

(BEGIN VIDEO CLIP)

POWELL: I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment.

Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do with integrity and a commitment to serving the American people.

(END VIDEO CLIP)

CORNISH: OK, straight ahead on "CNN This Morning," anti-government protests break out in Iran. But is regime change actually possible?

Plus, a historic synagogue in Mississippi set on fire. We're going to talk about the investigation into the blaze.

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