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Erin Burnett Outfront
Trump Open To Naming Special Counsel In Epstein Case; Trump Versus Powell; Obamas Talk Divorce Rumors. Aired 7-8p ET
Aired July 16, 2025 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[19:00:21]
ERIN BURNETT, CNN HOST: OUTFRONT next:
Is Trump opening the door to a special counsel to investigate the Jeffrey Epstein case? New developments as Trump skewers his own base, saying they're buying into what he calls B.S., that they're weaklings. What's his next move? We're going to talk to the president's former business partner, who will talk firsthand about Trump's relationship with Epstein.
Plus, Trump versus Powell. The president refusing to rule out firing the chairman of the Fed, zeroing in on the renovation of the Federal Reserve headquarters in Washington is a reason to fire him. Why? We have an OUTFRONT special report on that building tonight.
And, quote, it was touch and go for a while. The Obamas for the first time appearing together to joke about the divorce rumors. But it wasn't all laughs. And we'll tell you what else they said.
Let's go OUTFRONT.
And good evening. I'm Erin Burnett.
OUTFRONT tonight, is Trump caving to Laura Loomer. The president just did an interview with the website called "Just the News".
And the website writes of this conversation, quote, "Unprompted, Trump volunteering that a special prosecutor to look at weaponization could also delve into," quote, "anything credible on Jeffrey Epstein. Let's listen to what he said.
(BEGIN VIDEO CLIP)
JOHN SOLOMON, INTERVIEWER: Where do you think -- what are the things or most important, that you would like to see the FBI get to the bottom of?
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think they could look at all of it. It's all the same scam. They could look at this Jeffrey Epstein hoax also, because that's the same stuff. That's all put out by Democrats.
SOLOMON: Yeah. TRUMP: And you know?
(END VIDEO CLIP)
BURNETT: Of course, the severity of the Jeffrey Epstein case, a decades long operation involving child sexual abuse, is far from a hoax.
But Trump opening the door to a special prosecutor comes after MAGA diehard Laura Loomer and others called for one. Loomer warned today that the bitter division over Epstein was threatening to consume Trump's presidency. She told "Politico", and I quote, "I don't want it to consume his presidency. This is why I said, and I'll restate it -- reiterate it again. The best thing that the president can do is appoint a special counsel to handle the Epstein files investigation."
Now, of course, Trump's talking about a special counsel on weaponization. Maybe Jeffrey Epstein being part of that. Unclear what he's exactly saying, but an investigation by a special prosecutor, of course, could hit very close to home. Trump socialized with Epstein. Their pictures of them together all the way back in 2000.
Now, Trump, of course, has never been accused of any wrongdoing. And in a moment, I'm going to speak to Jack O'Donnell. He worked with Trump for years and saw firsthand what he says was a close friendship between Trump and Epstein. And all of this has clearly struck a nerve today. Trump lashing out at Republicans who have turned on him because of Epstein.
(BEGIN VIDEO CLIP)
TRUMP: It's all been a big hoax. It's perpetrated by the Democrats and some stupid Republicans and foolish Republicans fall into the net.
(END VIDEO CLIP)
BURNETT: Stupid and foolish Republicans, he says, falling into the net. But that was actually tame compared to the extraordinary rant that he posted on his own social media website, where he wrote, "My past supporters. He put past in all caps, have bought into this bullshit hook, line and sinker. Let these weaklings continue forward and do the Democrats work. Don't even think about talking of our incredible and unprecedented success, because I don't want their support anymore."
I mean, it's really stunning for Trump to turn on supporters like this, to call them weaklings, to go. I mean, to that level. And by the way, people who have said that there -- there needs to be a full accounting here include some of his most powerful supporters, Laura Loomer, Megyn Kelly, Tucker Carlson.
Trump, though calling out ostensibly all of them, as well as Democrats. His outrage clearly emblematic of the frustration that is building inside the White House over the inability thus far to turn the page on Epstein, a story that those closest to the center of power here have been fueling for years. I mean, J.D. Vance in 2021 said, remember when we learned that our wealthiest and most powerful people were connected to a guy who ran a literal child sex trafficking ring? And then that guy died mysteriously in jail. And now we just don't talk about it. And more recently.
(BEGIN VIDEO CLIP)
J.D. VANCE, VICE PRESIDENT OF THE UNITED STATES: Seriously, we need to release the Epstein list. That is an important thing.
(END VIDEO CLIP)
BURNETT: And it's not just his vice president. There's Trump's own son, Donald Trump Jr. July of 2023, he posted on X, "Show us all the Epstein client list. Now, why would anyone protect these scumbags? Ask yourselves this question daily. And the answer becomes very apparent."
And then there's Trump's attorney general, Pam Bondi, herself.
[19:05:04]
(BEGIN VIDEO CLIP)
JESSE WATTERS, FOX NEWS HOST: You said last week that you have the Epstein files on your desk.
PAM BONDI, ATTORNEY GENERAL: I do.
WATTERS: When can we see them? And what's taking so long to release them?
BONDI: I do.
(END VIDEO CLIP)
BURNETT: All right. So you can see why Trump's supporters are upset. And by the way, some of this frustration includes some of the young men who were crucial to Trump's victory in November.
Just listen to Charlie Kirk, one of the powerful and influential MAGA young podcasters right now.
(BEGIN VIDEO CLIP)
CHARLIE KIRK, FOUNDER, TURNING POINT USA: Gen Z is really fired up about this, especially young men. I mean, we're getting flooded with thousands, hundreds of thousands of comments that are very unhappy about this. And I think they're unhappy about it because they want and they voted for President Trump on a government. They want to have a mandate where they assail the deep state.
(END VIDEO CLIP)
BURNETT: And yet, Trump insisted just yesterday that the whole Epstein case is a big giant bore.
(BEGIN VIDEO CLIP) TRUMP: I don't understand why the Jeffrey Epstein case would be of interest to anybody. It's pretty boring stuff. It's sordid, but it's boring. And I don't understand why it keeps going.
(END VIDEO CLIP)
BURNETT: Boring. I mean, again, just to reiterate why this does matter, regardless of political persuasion. Take all that out of it. Epstein was arrested on federal charges of sex trafficking minors, underage girls. That same year, officials say he died by suicide in his solitary confinement. But the reality of it is, is all those years where these things were happening, he was rubbing shoulders with the rich and famous, spending a lot of time with rich and famous people.
And that is anything but boring. And knowing what really happened and who really did what if there's anything there is really important. And as for Trump calling it a hoax, it was not a hoax in 2015 when Trump used the scandal to try to attack his opponents.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Bill Clinton.
TRUMP: Nice guy. Got a lot of problems coming up, in my opinion, with the famous island with Jeffrey Epstein. A lot of problems.
(END VIDEO CLIP)
BURNETT: So not a hoax, then when it pertained to Clinton. Now, to be clear here, Clinton has never been accused of any wrongdoing. But Trump, of course, is someone who has never met a conspiracy theory that he didn't love.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Scalia, was he murdered?
TRUMP: They say they found the pillow on his face, which is a pretty unusual place to find a pillow.
A lot of people feel it wasn't a proper certificate.
His father was with Lee Harvey Oswald prior to Oswald's being, you know, shot.
There were people over in New Jersey that were watching it, a heavy Arab population, that were cheering as the buildings came down.
If you have a windmill anywhere near your house and they say the noise causes cancer.
(END VIDEO CLIP)
BURNETT: All right. Well, Kristen Holmes is OUTFRONT live outside the White House. And, Kristen, I know you've been talking to your sources, including
high profile MAGA players and influencers, some of whom this was core to them. They supported Trump because of his promise to release the so-called Epstein files.
What are they telling you now?
KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: Erin, they're disappointed, and a lot of them are confused and they don't quite understand how this went so awry. I mean, everyone agrees on one thing, which is that the rollout of all of this handled at the top by Attorney General Pam Bondi, was not great, that she said she had the files on her desk. Of course, the White House has walked that back. Bondi has walked that back.
But now you're seeing these blatant attacks on these people who not just voted for President Trump, but also helped him get elected. I mean, one of the things that we talked about enormously during the campaign was the fact that President Trump used these MAGA influencers to reach out to groups of people who had never voted before. And these influencers are people who perpetuated this idea that President Trump was going to get into office and release these files.
And it is important to understand why it matters to some of the people that support President Trump. This is not about just the fact that it's Jeffrey Epstein or that we haven't seen them. It's also about the fact that President Trump ran on this idea that the country is governed by these elites.
And then there was this other idea that Jeffrey Epstein was covering for these horrible scandals of these elites, and that was all part of Donald Trump's messaging that he was going to unveil all these elites. He was going to bring power to the people by doing this.
And Jeffrey Epstein was part of that, and that was the messaging we saw on that. So they're very disappointed and confused. We've seen some of them start to pivot away from this messaging on releasing the files, but it's unclear where this goes from here.
BURNETT: All right, Kristen, thank you very much.
Marc Caputo, of course, reporter covering the Trump inner world with us, along with Ryan Goodman, attorney, and Van Jones.
[19:10:02]
So, Ryan, Trump says that he's on board with the special prosecutor, although what that means may be different things to different people, right? He's saying the weaponization of the Justice Department. And yeah, if there's some Epstein in there, sure.
I guess the question is, would a special prosecutor get to the bottom of anything with Epstein?
RYAN GOODMAN, FORMER SPECIAL COUNSEL AT DEPARTMENT OF DEFENSE: So I think the problem that's being identified mainly is this idea that Kristen just alluded to and talked about, which is it's not just about Epstein, but the idea that Epstein was also involving many other people in the abuse of minors.
BURNETT: Right.
GOODMAN: And there's a civil suit in which, in fact, in the civil suit, they say it's not just Epstein, the two of the victims. They said it also included, quote, numerous prominent American politicians, powerful business executives, foreign presidents and other world leaders, end quote. And they were suing in order to do away with his plea deal, the sweetheart plea deal he got in Florida.
And I think that's the issue. If the issue is transparency, a special counsel is not the solution to that. A special counsel, if anything, would cloak this in more and more layers of publicity because the special counsel would be investigating crimes.
This is not necessarily the issue. The issue is just the transparency of releasing what's known. And if anything, if there was a final report from a special prosecutor, it would probably anonymized the names of people who are not indicted.
BURNETT: Right.
And that's what the whole point is. I mean, this is the point where you would think, Van, you take a step back Democrat, Republican, whatever your political persuasion, MAGA, Bernie land, whatever you are, if there are other people who were involved in sexually abusing minors with Jeffrey Epstein, people should know who they are and they should be brought to justice, right? That's the basic, simple thing at the core of this. And somehow that's controversial?
VAN JONES, CNN SENIOR POLITICAL COMMENTATOR: Well, first of all, the MAGA base is not as dumb as Donald Trump thinks it is. Apparently, Donald Trump apparently thinks the MAGA base is just literally full of idiots, that he can just be kind of David Copperfield and wave his hands, and we're going to forget 5 or 6 years of this stuff. The dumbest idea out here is a special prosecutor that's going to make it five more years before any of this comes out. If Donald Trump wanted to end this, he could end it right now. He could just release the files and be done with it.
He's not doing that. Now. I've been telling people behind the scenes, there's zero percent chance there's anything in there that's going to hurt Donald Trump, because otherwise Democrats would have released it. But he's acting so goofy today.
BURNETT: Right, it's not as if the files suddenly got in government possession when Trump became president. To be clear.
JONES: Exactly.
BURNETT: Yes.
JONES: So I've been trying behind the scenes, say, look, Trump has nothing to hide, but he's acting so goofy. Trump is acting like a big weirdo all day, and he's actually making himself look more suspicious to more people.
BURNETT: So, Mark, to this point about, you know, the Democrats had the files and they did write the Epstein files are not new. And in fact, Trump implying, I guess in this interview, maybe, you know, that that they may have been tampered with or something like that.
Let me just play what he just said in that interview. I played a clip in the introduction. Let me play another one.
(BEGIN VIDEO CLIP)
SOLOMON: One big prosecutor look at it all, would that make you feel good, do you think?
TRUMP: Well, I think it's -- in the case of Epstein. They've already looked at it and they are looking at it. And I think all they have to do is put out. Anything credible. But, you know, that was run by the Biden administration for four years. I can imagine what they put into files, just like they did with the others.
(END VIDEO CLIP)
BURNETT: So, Marc, is that -- what is his strategy here? You know, why not? I mean, is the implication there that somebody's doctored it and put in names that shouldn't be in there? I mean, I don't know. What is that?
MARC CAPUTO, SENIOR POLITICS REPORTER, AXIOS: I mean, that's part of it. It's also the Donald Trump immune system response. He knows he's going to be attacked because he was a friend of Jeffrey Epstein's. As you said, there's no evidence showing that he committed any wrongdoing. But because of that long association, if you wind up releasing files that are going to have various names in it, his name is going to be in there, not necessarily as a suspect, or maybe someone accused him of something.
But again, the totalitarian -- totality of evidence doesn't indicate that he committed a crime. But the headlines are going to be Donald Trump is in Epstein files. He knows that. It freaked out the White House last week when they got an inquiry from the media about whether Bondi had said that.
And so, what Donald Trump does when he feels he's being under attack, when he feels he's not getting the credit, when he feels he's unable to control the narrative, is he lashes out and he says wild things, and he begins to muddy the waters. It's just part of how he responds to things.
I mean, he sort of did the same thing with COVID. COVID came out, cases were going up. He started talking about COVID or related matters being a hoax.
Similar here. He's talking about the Jeffrey Epstein hoax. So, you know, the patterns are similar, though the circumstances are vastly different. BURNETT: It's interesting though, Ryan, again, back to the point of
something everyone should be able to agree on. The Jeffrey Epstein case is not a hoax. And by the way, Ghislaine Maxwell is serving 20 years in prison for aiding and abetting sexual trafficking of minors for Jeffrey Epstein.
GOODMAN: A hundred percent, their underlying evidence is Jeffrey Epstein was indicted himself under the Trump administration in 2019 for sex trafficking with these minors across international borders and borders inside the United States.
[19:15:00]
It happened. And the only question, I think is like, who exactly was involved in it? That's the big question, because it wasn't just these two individuals. It was -- it was a pedophile ring in a sense.
BURNETT: And I think your point on the special counsel is so crucial, which is that even if something were to come out, names are redacted so that transparency doesn't exist.
JONES: But the point of a special prosecutor isn't to release stuff, it's to investigate stuff and maybe file a charge later. So if they're going to file a charge later, they're definitely not going to release anything.
In other words, what Laura Loomer is saying is going to push -- is going to kick this puck so far down the road that this story will never go away. So, it's the worst idea I've heard today.
BURNETT: The special counsel.
JONES: The special counsel.
BURNETT: So, Marc, can we talked about Trump on social media and he said it in the, you know, in the interview, his frustration with Republicans, right? That he said are getting on -- getting on board with Democrats. But you know those Republicans that he called in his social media post, weaklings, he called them, let those weaklings continue forward -- talking about his own, his own people and saying, because I don't want their support anymore.
Now, Marc, those weaklings include powerful people who speak to a lot of people -- Laura Loomer, Megyn Kelly, Tucker Carlson, all people who have indicated they want more transparency here.
CAPUTO: Well, yeah, but Donald Trump is not just a leader of the movement. He sort of is the movement. And he has led to believe over time that he can sort of bend reality and his base to his whim and his will.
Now, that said, it's important to remember that while Donald Trump does occupy that powerful position, he does pay attention to his base. And I suspect he does know that he is out of step with it. The comments that he made to John Solomon are an indication that some sort of special master, special prosecutor, whatever is going to come up. In "Axios" yesterday, I wrote that there were three possible pathways that the administration advisers are examining. One of them is the special master, a special counsel idea. And it's not necessarily just limited to prosecution. It also would entail reviewing files that they could release and sort of real time.
And in addition to that, also petitioning courts to release information. So they're workshopping ideas. It wouldn't surprise me if you saw Bondi eventually announce a change and say, okay, were going to have an independent person look at this.
BURNETT: So, Ryan, just a quick bottom line. Are we ever going to know the names of people who are, whatever these files may or may not be, but might have done something?
GOODMAN: There's one avenue, at least. Ghislaine Maxwell has said that she would testify before congress, and several Republican members of Congress have said that they support that, and that would be a way to get at it, because I think the Justice Department will always have a problem releasing any information about somebody who's not indicted. But that's not true, for --
BURNETT: And she knows she knows a lot of them, if not all of them.
All right. Thank you all very much.
And next, I'm going to speak with a man who worked with Trump and knows the billionaire better than most. He tells OUTFRONT he heard the name Epstein a lot. Jack O'Donnell is next.
Plus, Trump tonight seizing on the federal reserve headquarters renovation as a way to potentially oust the Fed chair. We have a special report on that whole renovation. Exactly what is it?
Also breaking Putin, seizing on Trump's 50-day ultimatum, now bombing a Ukrainian shopping center, a desperate search for survivors is underway as we speak.
(COMMERCIAL BREAK)
[19:22:42]
BURNETT: Breaking news, President Trump suggesting that the FBI should look into the Epstein case, but not necessarily because of Epstein's actions, but because he says it's a scam pushed by Democrats.
(BEGIN VIDEO CLIP)
TRUMP: But they ought to look into the Jeffrey Epstein hoax because that's another hoax that's frankly put out by the -- pushing, pushing the Republicans and put out by the Democrats.
(END VIDEO CLIP)
BURNETT: Just to be specific on timing, Epstein was investigated and arrested during Trump's first term. Now, Trump and Epstein, of course, were once friends. Trump's talked about that in the same circles decades ago. This photograph goes all the way back to 1997, in Mar-a- Lago. So, it's a long time ago, and Trump hasn't been accused of any wrongdoing in the Epstein case.
OUTFRONT now is Jack O'Donnell, the former president and chief operating officer of the Trump Plaza Hotel and Casino.
Jack, you know, just as all this conversation comes up, you know, we've talked to you many times over the years, you know, you and I. But you worked with Trump in an important period, in 1987 to 1990. And I know that's -- you know, we talk about a lot of these -- this friendship going back that long. You heard the name Jeffrey Epstein a lot during the time you worked with Trump.
Can you tell us about their friendship?
JACK O'DONNELL, AUTHOR, "TRUMPED!: THE INSIDE STORY OF THE REAL DONALD TRUMP": Oh, sure. You know, I mean, first off, it's laughable that it wasn't a good friendship if not his best friend during those days. I mean, he frequently came down to Atlantic City. The two of them, to attend special events.
I heard reference in several conversations, and in one conversation where, you know, where I had to specifically talk to him about Epstein and his presence in the casino. So, it was -- I mean, I mean, it was in my mind, it was his best friend, you know, you know, from really the time I was there for four years. You know, his name was, you know, not constant, but it came up quite a bit.
BURNETT: And, you're saying they would, from what you recall, come down to the casino together. I mean, Trump has called Epstein a terrific guy. A lot of fun to be with. Now, that was a "New York Magazine" interview all the way back in 2002, predating any of these, any knowledge of Epstein's nefarious actions.
[19:25:00]
More recently, Trump has downplayed his relationship with Epstein.
Back in 2019, he said this, and this is right after, Jack, Epstein was taken into custody.
(BEGIN VIDEO CLIP)
TRUMP: I knew him like everybody in Palm Beach knew him. I mean, people in Palm Beach knew him. He was a fixture in Palm Beach. I was not a fan of his. That I can tell you. I was not a fan of his.
(END VIDEO CLIP)
BURNETT: That doesn't really fit with what you're saying.
O'DONNELL: No, no, Erin, it doesn't. And you know, one incident that I think kind of, you know, proves their closeness and how much they hung out together one time a Monday morning, I came in and the commission was waiting. The inspectors were waiting at my office, and Donald and Jeffrey had come into -- into the casino in the wee hours of Sunday morning, 1:00, 1:30 in the morning.
You know, two buddies, they had -- they had three women with them. And the commission was waiting for me because they had determined that the women that they brought down were underage to be on the casino.
And when I asked them how they knew that, by the way, one of them was the number three ranked tennis player in the world, okay. And he -- this guy happened to be a tennis fan. And he said, Jack, I know she's 19 years old. Okay?
So -- you know, and to get on a helicopter with a friend and three other people and fly down to Atlantic City. I mean, you can connect those dots. They were pretty --
BURNETT: At 1:30 in the morning. And just to be clear, the -- when you say underage for the casino, underage for the casino would be 21, right? So not necessarily legally underage girls. Right. Not -- not in that case.
O'DONNELL: No. Not in the sense of, of a minor, so to speak that's been described with Epstein. They were underage to be in the casino, and they knew for a fact that one of them was 19 years old. Nobody carded them, by the way, because either the commission staff or my staff, because they were intimidated to do so. And that's why the commission was actually going to find me for Donald's discretion.
Now, one of the things that they made me do is they made me call him, and I had to, believe it or not, read him the Riot Act about this action because they gave him a break back in those days. And I think even today, the fines are substantial. They can even suspend your license for letting minors in the casino.
And I had to call him and say, look, they're giving you a break this time. But if this happens again, the fine is going to be substantial and it's going to be on your head. And oh, by the way, it's not going to look good. You and this guy Epstein coming down here with these young women.
BURNETT: What did he say?
O'DONNELL: Oh, well, he was -- he was shocked that they let him off the hook. First off, he, you know, he was flabbergasted. He said, I can't believe they're letting, you know, they're not throwing the book at me. Nobody gives me a break.
And that really was his reaction, you know, and I and I did tell him in that conversation, you know, I don't think you should be hanging out with this guy, you know, just so you know, and you certainly shouldn't be doing that in Atlantic City.
BURNETT: All right. Jack O'Donnell, thank you very much. And for all of this and sharing your recollections here, I appreciate it. It's always good to talk to you. So now you hear what Jack had to say. I want to go to the veteran investigative journalist Barry Levine, who
is the former executive editor of "The National Enquirer". He was in that role for 17 years, the author of "The Spider: Inside the Criminal Web of Jeffrey Epstein and Ghislaine Maxwell", where he led an exhaustive investigation into Epstein.
So, Barry, you know, you hear what Jack had to say. You know, the Jeffrey Epstein case better than almost anyone. So, when you take a step back and you look at all this firestorm right now that is out there, what key information is still being withheld from the public?
BARRY LEVINE, AUTHOR, "THE SPIDER: INSIDE THE CRIMINAL WEB OF JEFFREY EPSTEIN & GHISLAINE MAXWELL": Well, Erin, certainly, I first want to say that calling this thing a hoax is such an insult to Jeffrey Epstein's victims. As the Justice Department told us, there's about a thousand victims who had been abused. And for this to be called a hoax is just horrible, say that to the woman who swam from his island to escape, say that to the families of three of his victims who -- who have passed on, one from suicide, two from accidental overdoses.
So, you know, I'm absolutely appalled at as how Trump is handling this situation. But there is still so much that we can learn from these files. And I think that, as the speaker said, let's see transparency here, because not only can we learn more about men who are in his circle, who were in his web, as I wrote in my book, who were involved in this, but we can also learn the financial connections of how the money was distributed to him.
[19:30:09]
I mean, it took -- it took millions of dollars for him to maintain this operation over two decades. And we need to see exactly how the FBI treated this, who they investigated. Were there financial crimes here of individuals that need to be looked at?
BURNETT: So just a few moments ago, Barry, before you and I were speaking, just before the show came to air, the federal prosecutor for Epstein and Ghislaine Maxwell, Maurene Comey. All right? That's her name. Does the name sound familiar? It should, because she happens to be the daughter of the former FBI director, James Comey. Okay?
So, she was just fired, all right? She was just fired. Is James Comey's daughter. She was the one looking at this case. I just take politics out of it because I know they'll be all politics all over this one, right? It'll be -- it'll be flies over a carcass.
But you're very familiar with her work. What do you make of her firing?
LEVINE: You know, it is. It is, you know, another situation here in this week of absolutely horrible things that have come out of the -- out of -- out of Trump in terms of this firing that's taking place. She was such an advocate for the victims of sexual abuse. She took part in the successful prosecution of Ghislaine Maxwell. She was on the team for the Jeffrey Epstein prosecution in 2019, just an excellent part of that team in New York and the Southern District. And for this to go down the circumstances, there are two similar as to
what he said about her father. And then you have this result. So, it looks to me like it is just -- she was knocked down because of her, of her dad. And it's sad.
BURNETT: Well, it's important, you know, you've written the book and done so much on this, it's important that you can talk for the facts of her performance and who she was and what she was doing, and that -- that's what matters.
So, Barry, thanks so much. I appreciate your time and you taking the time to talk to me.
LEVINE: Thank you, Erin.
BURNETT: All right. Next, Trump hinting he might use the Fed's renovation of its headquarters as a way to possibly oust the Fed chairman. So, what exactly would that entail? And what is this renovation? Well, we're going to take you inside it.
Plus, the Obamas for the first time together addressing the divorce rumors.
(BEGIN VIDEO CLIP)
MICHELLE OBAMA, FORMER FIRST LADY: There hasn't been one moment in our marriage where I thought about quitting my man.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
[19:37:22]
BURNETT: Breaking news, President Trump just saying he hopes Jerome Powell will resign as Federal Reserve chairman. Of course, no sign of any such thing. But this comes just hours after Trump refused to rule out firing Powell. And after a source told CNN that Trump said he had a draft letter ready to go that would have fired Powell.
Here's what the president, who's been highly critical of Powell for not cutting interest rates, just said when asked if he thinks Powell should resign.
(BEGIN AUDIO CLIP)
TRUMP: I'd love if he wants to resign, that would be up to him. They say it would disrupt the market if I did. But, you know, there are many people who say he should be removed because of the fraud of what he's doing at the Fed with regard to the two and a half billion dollars, he's spending $2.5 billion to -- I guess it's a renovation. I don't know.
UNIDENTIFIED MALE: All it is, it's just a renovation.
TRUMP: I'm very good at that stuff. I should go look at it. (END VIDEO CLIP)
BURNETT: The issues Trump is raising about the renovations is key. It's key because he cannot fire Powell over interest rates. Hard to say for cause, right? That's just too complicated.
He can fire him for cause, for specific cause. So, what Trump is hinting loudly is that the Fed renovation, mismanagement of the funds, whatever it might be, cost overruns, that could be the cause.
And Brian Todd is OUTFRONT with more on all of this renovation.
(BEGIN VIDEOTAPE)
BRIAN TODD, CNN CORRESPONDENT (voice-over): Sitting on a coveted property alongside Washington's National Mall, two stately marble- facaded buildings now ringed by construction, fencing covered in scaffolding, so-called blue skin, waterproof coverings on the windows. The two buildings headquarters of the Federal Reserve and their costly renovation are President Trump's latest weapon in his war against Fed Chairman Jerome Powell.
TRUMP: I mean, it's possible there's fraud involved with the $2.5 billion -- $2.7 billion renovation. This is a renovation.
TODD: The president indicating today that while it's unlikely he'll fire Powell, it could still happen if fraud is involved in the $2.5 billion renovation, a project that's been hammered on by the president and his allies for weeks.
TRUMP: The one thing I didn't see him as a guy that needed a palace to live in. I think when you spend two and a half billion dollars on really a renovation, I think it's pretty disgraceful.
TODD: Of course, Powell doesn't live in the building, but that hasn't stopped Trump from tying him to the renovation, the cost of which has shot up in recent years from $1.9 billion to $2.5 billion. The Fed says the buildings had to be upgraded because their electrical grids, plumbing, HVAC and fire detection systems were antiquated. The buildings were constructed almost 100 years ago.
There have been claims that the renovation would include expenditures for lavish items like rooftop gardens, water features and VIP elevators.
[19:40:02]
SEN. TIM SCOTT (R-SC): It sends the wrong message to spend public money on luxury upgrades that feel more like they belong in the palace of Versailles than a public institution.
TODD: But Powell and the Fed say those features were either not in the plans or were scaled back.
JEROME POWELL, FEDERAL RESERVE CHAIRMAN: Some of those are just flatly misleading. The idea of elevators, you know, it's the same elevator. It's been there since the building was built. So that's a -- that's a mischaracterization. And some of those are no longer in the plans.
TODD: The Fed says the cost overruns are really due to things like the cost of removing more asbestos than anticipated, soil contamination and inflation.
DAVID WESSEL, THE BROOKINGS INSTITUTION: I think the building is just a sideshow. It's an excuse to make life miserable for Jay Powell because President Trump, who, of course, appointed him, doesn't like what he's doing.
TODD: What Powell is doing is not moving aggressively enough for Trump's liking to lower interest rates.
TRUMP: He's a knucklehead. He should have cut interest rates a long time ago.
TODD: Powells resisted rate cuts out of concerns that Trump's tariffs could spark more inflation. But Trump and his allies continue their relentless pressure on Powell. Trump's Budget Director Russell Vought, sending a letter to Powell saying the president was extremely troubled by his management of the fed, including his, quote, ostentatious overhaul of the headquarters.
(END VIDEOTAPE)
TODD (on camera): Now, according to a source familiar with the matter who spoke to CNN, Powell has asked the Fed's inspector general to conduct an additional review of this renovation. Powell has only about ten months left in his term, unless Trump can find cause to remove him sooner. Analyst David Wessel says he does not think the controversy over this renovation project would stand up in court as a credible cause to remove Powell -- Erin.
BURNETT: All right. Brian, thank you.
And I want to go now to Jim Bianco, longtime Fed watcher, president of Bianco Research investment analysis, one of the most well-known followers of the markets and the bond markets.
So, Jim, let's just get to the heart of this. You think the optics here, putting aside what Trump is doing, but the optics here don't look good for Powell. How come?
JIM BIANCO, ECONOMIC ANALYST, BIANCO RESEARCH PRESIDENT: Yeah. Well, there's two things about the Fed that is kind of set this up, maybe not for Trump per se, but for somebody. One, the Fed chairman pretty much decides monetary policy. And I like to compare him to the Supreme Court Chief Justice Roberts. He doesn't decide how they're going to vote. He's one of nine votes.
In theory, the Fed chairman should be one of 12 votes, but he really isn't. So he gives them oversize power. So there's one person you could focus on if you don't like fed policy as opposed to 12. The other optics problem is the fed cut rates last year in September
by 50 basis points. That was -- they started cutting rates right after Labor Day before an election. They've never done that before.
It turns out in hindsight, that was probably not necessary. Now, I could argue that that was a justifiable move. It just didn't work out the way it did. But the Fed's communication has always been kind of poor, and they haven't really explained it well.
So, if a Republican wants to stand up and say, look, you did that to goose the economy to try and prevent Donald Trump from winning, you could argue, well, if they were actually doing that, that's exactly what they would have done. And they don't do a good job of explaining why they did it in the first place.
BURNETT: So, all right, so those optics obviously aren't great. But then you sit here and you have Trump coming out and calling Powell all sorts of things. He's called him stupid knucklehead. All those things. Right. Personal and pejorative.
The independence of the Fed Chair is something, of course, that should be sacred in this country. So, Trump says he met with Republicans last night who supported and in fact, were enthusiastic, saying fire Powell, fire Powell.
But then today, the Republican Senator John Kennedy spoke out and he had a warning for Trump about firing Powell. I want to play it for you, Jim.
(BEGIN VIDEO CLIP)
SEN. JOHN KENNEDY (R-LA): If you fire the chairman of the Federal Reserve, you will see the stock market crash and you will see the bond market crash.
(END VIDEO CLIP)
BURNETT: What could happen?
BIANCO: That is a possibility that you could see those happen. But the reality is, I mean, I'm just trying to think this through. If he was to fire Powell and Powell, were to leave and not stay and try and fight it in court, which he probably would do.
But if he left, Philip Jefferson would probably take over as the Federal Reserve chairman. And because he's the vice chairman and nothing would really change because the other 11 voters would probably continue with this policy of not cutting rates. And I think that would temper the market.
But at the end of the day, you would create chaos with the Fed. You would reduce its independence, and you would not get what you would want in the long run, and that would be a cutting of rates and you would weaken the institution and you would worry markets that we've got a loss of confidence and you'd hurt the dollar. So, it would definitely. Now, whether or not I'd go as far as to say the word crash, well,
maybe that's a semantic thing, but it wouldn't be good and you wouldn't want to see it happen in the first place.
BURNETT: All right. Well, let's hope it doesn't happen.
Jim, thank you very much, as always.
And next, Putin taking advantage of Trump's 50-day window. More strikes across Ukraine, Ukraine including a shopping center.
[19:45:03]
We're going to go live to Moscow tonight.
Plus, the Obamas addressing those divorce rumors for the first time together.
(COMMERCIAL BREAK)
BURNETT: Breaking news, rescue operations underway in Eastern Ukraine after a deadly Russian bombing of a shopping center. Ukrainian officials say at least two were killed, 27 injured in that strike. The attack coming hours after Putin launched a barrage of 400 long range drones on four key regions in Ukraine. This all comes as Trump has given Putin verbally 50 days to end the war.
Matthew Chance is OUTFRONT with this report tonight from Moscow.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN CHIEF GLOBAL AFFAIRS CORRESPONDENT (voice-over): This is what Russia's 50-day window in Ukraine looks like. Overnight, hundreds of drones pounded towns and cities across the country, the biggest attacks of the entire war, said Ukrainian officials.
[19:50:04]
Despite President Trump's sanctions threat, the Kremlin is showing no sign of letting up.
"Russia is not changing its strategy," the Ukrainian president posted on X, demanding more air defense systems, more interceptors and more determination.
Russian President Putin inspecting a metals factory in Magnitogorsk, nearly a thousand miles from Moscow, hasn't even commented yet on the U-turn in Washington. But his officials are brushing off concerns over sanctions. And even European deliveries of U.S. weapons authorized by President Trump.
DMITRY PESKOV, KREMLIN SPOKESPERSON (through translator): It's business. There were supplies before and no one stopped them. It's just a question of who pays. Now, some Europeans will pay for them.
BURNETT: And Russia seems to believe it has the upper hand. Latest footage from the Russian defense ministry purports to show its forces, quote, successfully advancing and improving tactical positions along the front lines in eastern Ukraine.
By the time President Trump's 50-day window for a peace deal has closed, the Kremlin may have significantly tightened its grip.
(END VIDEOTAPE)
BURNETT: And, Matthew, you know you're in Moscow tonight.
So, what else are you hearing from the Kremlin about Trump's pledge right now? As it stands to send more offensive weapons to Ukraine?
CHANCE: Well, I mean, look -- I mean, publicly, Erin, they're basically, you know, playing it down. The significance of it. But they're also saying that they're watching very closely those arms deliveries, you know, potentially from European countries as well as from United States.
They're particularly concerned about the -- about long-range missiles. Now, already the United States and now Germany have ruled out the sending of long-range missiles to Ukraine, at the moment, more of them, at least. But nevertheless, it's something that the Russians continue to be concerned with, and they're saying that.
And so, that's one of their main issues that they're dwelling on here in Moscow, Erin.
BURNETT: All right. Matthew, thank you very much in Moscow tonight.
And next, the Obamas breaking their silence tonight on the divorce rumors. And you'll hear what they both had to say after this.
(COMMERCIAL BREAK)
[19:56:47]
BURNETT: Tonight, touch and go. That's how former President Barack Obama is jokingly describing his marriage to Michelle Obama as the two, for the first time, break their silence on rumors of divorce and the first lady making it clear that she is still all in.
(BEGIN VIDEO CLIP)
MICHELLE OBAMA, FORMER FIRST LADY: There hasn't been one moment in our marriage where I thought about quitting my man.
(END VIDEO CLIP)
BURNETT: Arlette Saenz is OUTFRONT.
(BEGIN VIDEOTAPE)
M. OBAMA: It's my husband, y'all.
BARACK OBAMA, FORMER U.S. PRESIDENT: She took me back. ARLETTE SAENZ, CNN CORRESPONDENT (voice-over): Barack and Michelle
Obama, one of the world's most famous power couples, are taking on the rumors about their marriage with humor.
B. OBAMA: It was touch and go for a while.
GLENN ROBINSON, PODCAST HOST: It's so nice to have you both in the same room together.
B. OBAMA: I know.
M. OBAMA: I know, because when we aren't, folks think we're divorced.
SAENZ: For months, speculation about their marriage has run rampant, fueled in part by the former president's appearances without his wife by his side, including President Donald Trump's second inauguration.
M. OBAMA: People couldn't believe that I was saying no for any other reason, that they had to assume that my marriage was falling apart.
SAENZ: Now, for the first time, the Obamas are speaking out together on the former first lady's podcast to shoot down those rumors of divorce.
B. OBAMA: These are the kinds of things that I just miss, right? So I don't even know this stuffs going on.
ROBINSON: Right.
B. OBAMA: And then somebody will mention it to me and I'm all like, what are you talking about?
ROBINSON: Yeah.
M. OBAMA: There hasn't been one moment in our marriage where I thought about quitting my man, and we've had some really hard times that we had to have -- had a lot of fun times, a lot of adventures. And I have become a better person because of the man I'm married to.
B. OBAMA: Okay, don't -- don't make me cry now, right at the beginning of the show.
SAENZ: The Obamas met in 1989, working at a law firm in Chicago. They married three years later and had two daughters.
MALIA OBAMA, FORMER FIRST DAUGHTER: I love you, daddy.
SAENZ: Their marriage thrust into the public spotlight as his political ambitions carried them to the White House.
B. OBAMA: I would not be standing here tonight without the unyielding support of my best friend for the last 16 years, the rock of our family, the love of my life, the nation's next first lady.
SAENZ: But between the dancing and the kiss cameras, the couple also has spoken about their struggles. B. OBAMA: She wasn't the one who chose this life. We went through our
rough patches.
M. OBAMA: I don't want people looking at me and Barack like #couplesgoals.
HOST: Yeah.
M. OBAMA: And not know that, no, no, there are some broken things that happen even in the best of marriages.
SAENZ: And over the years, the Obamas have shared tips for making their nearly 33-year marriage work.
M. OBAMA: I was one of those wives who thought, I'm taking you to marriage counseling so you can be fixed, Barack Obama, because I was like, I'm perfect. But marriage counseling was a turning point for me, understanding that it wasn't up to my husband to make me happy.
B. OBAMA: I was in a deep deficit with my wife, so I have been trying to dig myself out of that hole by doing occasionally fun things.
SAENZ: Arlette Saenz, CNN, Washington.
(END VIDEOTAPE)
BURNETT: Thanks so much to Arlette, and thanks to all of you for joining us.
"AC360" starts now.
