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Federal Reserve To Decide On Interest Rates Tomorrow; President's Self-Imposed August 1st Tariff Deadline Looms; Texas Republicans Plan Partisan Redistricting To Gain Seats; Poll: Democratic Party Favorability Is 30 Points Underwater; Former Rep. Wiley Nickel Drops Out Of NC Senate Race, Endorses Roy Cooper. Aired 12:30-1p ET

Aired July 29, 2025 - 12:30   ET

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

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[12:31:59]

MANU RAJU, CNN ANCHOR: Tomorrow, the Federal Reserve will decide whether to cut interest rates. The meeting comes as the Federal Reserve Chair is under immense pressure, both from the President of the United States and within the Fed itself.

CNN Senior Reporter Matt Egan joins me now. So, Matt, walk us through what to expect from today's meeting.

MATT EGAN, CNN SENIOR REPORTER: Well, Manu, I am expecting that the president is going to be disappointed by the results of the decision tomorrow. Because President Trump, he's been pounding the table, not for tiny interest rate cuts, but for massive ones. But Wall Street sees no change in interest rates coming from tomorrow's decision, just a 3 percent chance priced into the market of an interest rate cut tomorrow.

However, the market does see about a 2 in 3 chance of a cut at the next meeting, the one in September. So the main event is going to be Fed Chair Jerome Powell. He's going to be taking questions, and investors are going to be dissecting every single word that comes out of his mouth about a potential rate cut going forward.

Now, the President and Powell, obviously, their relationship has been very tense. The president has been attacking him on deeply personal terms all year. Back in April, the president called Powell a major loser. He said his termination cannot come fast enough.

Although there was a little bit of a softening in the president's tone at the end of that awkward encounter last week between Trump and Powell. At the end of that, the president did say that he thinks that Powell will, quote, "do the right thing."

Now, just yesterday, President Trump was asked whether or not he expects the Fed to cut rates this week. Take a listen to what the president said.

(COMMERCIAL BREAK) DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Doing so well, even without the rate cut. With the rate cut, it would be better. It affects our housing a little bit.

(END VIDEOCLIP)

EGAN: Now, it is worth noting that Powell, he has stressed that at the end of the day, the Fed is going to do the right thing. They're not going to listen to external criticism. But, Manu, as you alluded to, there is some more tension within the Fed because we are expecting that not one, but two of Powell's colleagues on the Federal Reserve Board of Governors will dissent tomorrow. And they could be voting in favor of an interest rate cut.

And, Manu, we have not seen two dissents on the Fed board in over 30 years. Back to you.

RAJU: All right. That will be something to dissect indeed.

Matt Egan, thank you so much.

My panel is back. You know, if you're Powell, you're in this really difficult position here because if you make it look like you're moving to cut rates, you make it look like you're getting pressure by the United States to do something when the Fed is supposed to be an independent body from the White House.

DAVID WEIGEL, POLITICS REPORTER, SEMAFOR: Yes, you alluded that well, that this has created more of a problem for the Fed moving. What's the precedent -- they said, what's the precedent for a future possibly Democratic president? Because Joe Biden wanted the Fed to cut rates multiple times before the 2024 election.

And there was a tradition. The president doesn't jawbone this independent agency. What problem would cutting interest rates solve? What would they create?

[12:35:03]

This is what's kind of being left out of the conversation because you heard the president defend the economy. Taxes are low. They've just been cut again. You have Josh Hawley talking about sending people rebate checks based on the tariffs.

You could otherwise say that you need to cut rates because the pressure of tariffs on Americans. But the Fed's worried about overheating the economy because of all stimulus policy from the Trump administration and nothing that a tariff necessarily would fix except it would be nice for people's mortgages to go down and Trump take credit. That's what Powell is trying to stave off.

RAJU: And Powell has indicated that he's not moving ahead or does not favor rate cuts in his time in large part because of the tariffs, the uncertainty of the tariff policy. Of course, a huge decision coming up Friday when a whole host of countries could face new tariffs unless some deal is cut or Trump decides to delay it again. And here is how Trump has answered the question about tariff, tariff timing, moving ahead, not moving ahead, negotiating and not negotiating.

(BEGIN VIDEOCLIP)

TRUMP: In a few moments, I will sign a historic executive order instituting reciprocal tariffs on countries throughout the world. The tariffs will be not a full reciprocal.

Both be true. There can be permanent tariffs and there can also be negotiations because there are things that we need beyond tariffs.

I did a 90-day pause for the people that didn't retaliate.

UNIDENTIFIED MALE: Is the August 1 deadline firm now?

TRUMP: I would say firm -- no. I would say firm but not 100 percent firm.

Every time we put out a statement, they say he made a change. I didn't make a change. Clarification, maybe. No, August 1st, they pay.

(END VIDEOCLIP)

RAJU: Clear enough for you? I mean, perhaps the one thing that I would say when he says -- is the August deadline firm now, he said, I would say firm but not 100 percent firm. So there you have it.

LEIGH ANN CALDWELL, CHIEF WASHINGTON CORRESPONDENT, PUCK: Yes, I mean, who knows? Trump obviously operates on a whim. A lot of this is a negotiating tactic too. He is really pushing the August 1st deadline to get these countries to come to make a deal with the administration on these tariffs. But we'll see.

We're like a whole four days away from August 1st. Anything can happen, including another extension.

RAJU: Yes, indeed. But the reason why this is so significant, just look at that on your screen, the number of countries who could be impacted by this, really countries all around the world, but 50 percent on Brazil, 35 percent Canada and the like. So obviously this has massive ramifications worldwide.

AYESHA RASCOE, NPR HOST, "WEEKEND EDITION SUNDAY" AND "UP FIRST": It has massive ramifications. And it's still not clear what is the benefit that Americans are getting from these tariffs. It seems like he's kind of taking it with -- and doing some deals where, OK, we'll leave you at 10 percent, we'll leave you at 15 percent and maybe get some concessions.

But is this remaking the U.S. economy? Are we going to become major manufacturers now? Like, what are we getting from this?

RAJU: Yes, that's going to be the big question going forward, and how much will this impact Americans at their pocketbook. All right, coming up, it's a redistricting rodeo in the Lone Star State. But can Democrats do anything about it? I'll talk to a rising star in Texas politics after the break.

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[12:42:25]

RAJU: Texas state lawmakers are in the middle of a special legislative session where Republicans are trying to redraw the state's congressional maps, something that is normally done only at the start of a decade. And they've been pretty transparent about why. President Trump said earlier this month he hopes to get five more Republican seats in the House ahead of next year's midterm elections.

My next guest is on the front lines of Democrats' effort to push back on GOP redistricting. That's Democratic State Representative James Talarico, who joins me live now from the State Capitol. Representative, thank you so much for joining me this afternoon. I really appreciate your time.

So I want to start out with what's happening and what you've been dealing with there. If the Texas GOP is indeed successful in adding those seats to the U.S. House, how are Democrats planning to respond in fighting back on this legislative effort? Specifically, are you contemplating boycotting the legislature to deny a quorum, as your caucus has done on other issues in the past?

REP. JAMES TALARICO (D), TEXAS HOUSE OF REPRESENTATIVES: Well, all options are on the table. My colleagues and I are going to use every tool in our toolbox to stop this power grab from going through. I mean, the president is trying to rig the next election. That's what's happening here.

He and his allies in D.C. just passed the largest transfer of wealth in American history with their Big Beautiful Bill, kicking millions of Texans, millions of Americans off their health care to fund tax breaks for billionaires. And they know that's unpopular, but they don't care because they have this plan, this plan to redraw the political maps here in Texas, to turn our districts into these crazy shapes so that they can guarantee the outcome they want in the next election, regardless of how we all vote. And if this works, if they get away with this power grab, they're never going to have to fear the voters ever again.

RAJU: You say that boycotting is an option, but you've tried that once before, Democrats having the state leaving the state in 2021 over a bill that you allege infringed on voter rights. That effort, though, was ultimately unsuccessful. So what would be successful this time if you were to boycott the state legislature?

TALARICO: Well, I disagree because I was a part of that walkout in 2021. And because we did that, because we raised awareness across the country of what was happening with the Republican voter suppression bill, it pressured my Republican colleagues to take the worst parts out of that bill, the provision that would allow them to overturn election results, the ban on Sunday morning voting that affects African-American churches.

[12:45:00]

And so that pressure actually worked to make the bill less harmful. Again, the bill ultimately passed. I wish it hadn't. But in the minority, we can use all of these tools to delay, to kill, or to improve harmful legislation. And I think that's what we're committed to doing this year with this unlawful redistricting attempt.

RAJU: Let's talk about Democrats nationally and the real struggles your party still has in connecting with voters. A new Wall Street Journal poll shows Democrats are underwater by 30 points, with only 33 percent seeing your party favorably. And that is consistent with other national polls, including here at CNN.

So despite President Trump's unpopularity, your party only has a three -- has a slight three-point advantage on the generic congressional ballot. So why is your party still failing to connect with so many voters?

TALARICO: Well, and I would say there are probably a lot of Democrats that disapprove of the National Democratic Party, too. You know, I think there is a real need for my party to get outside of its comfort zone, to go into places where we don't typically go and talk to folks that we don't typically talk to.

You know, it's why I went on Joe Rogan's podcast. It's why I've been on Fox News. It's why I've been on the Christian Broadcasting Network. We've got to break outside of our bubbles. We've got to meet people where they're at, because politics at its core is about addition, not subtraction. And I think that's something my party has struggled to do in recent years.

We've got to build a big coalition, a big tent. We're not going to agree on every issue, but that coalition is what's necessary to save this American experiment and be able to take power back from the people at the very top that are taking away our health care and --

RAJU: Yes.

TALARICO: -- rigging the system for themselves and their rich friends.

RAJU: And Representative, you mentioned Joe Rogan. When you were on his podcast, he urged you to run for president. But there's obviously a big Senate race in your state next year for the seat occupied by Republican John Cornyn. Former Democratic Congressman Colin Allred is running again after losing last cycle. But what about you? How seriously are you considering a run for Senate next year?

TALARICO: I am seriously looking at it. But if I'm being honest with you, you know, my full attention is here at the State Capitol during this special legislative session. I mean, if we allow this power grab to go through, it's going to prevent us from making progress on all the issues we care about, health care, education, taxes.

You know, these are things that we're going to have to be able to do. And this power grab is stopping us from making that progress. So I'm committed to doing the job that I already have.

You know, my constituents here in Central Texas elected me to fight for them at the state Capitol. That's what I'm going to do before I start thinking about applying for other jobs.

RAJU: But have you spoken to the Senate Democratic Leader Chuck Schumer about a possible run?

TALARICO: I have not.

RAJU: You have not. OK.

All right, we'll see your -- what you -- what decision you ultimately make, seriously considering a run for Senate as you're dealing with this issue in Texas.

Representative Talarico, thank you so much for taking the time and speaking with me. Really appreciate it.

TALARICO: Thanks for having me on.

RAJU: Absolutely.

Up next, there's a blue band forming in North Carolina. We have the details after a quick break.

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[12:52:26]

RAJU: Today, Democrats are uniting in the Tar Heel State. Former Congressman Wiley Nickel just announced he's suspending his Senate bid and endorsing Roy Cooper for the job.

My panel is back. So, avoiding a primary for Democrats. Republicans may avoid a primary there. You always want to avoid a primary in Senate races. But as you heard in the last segment, talking to the State Representative Talarico, he's open -- considering a run for the Senate seat in Texas. There could be a Democratic primary in Texas when they desperately want to pick up that seat.

CALDWELL: Yes, absolutely. You know, my sources have said they've been trying very subtly to clear fields in some of these races, especially Texas, to make sure that there aren't primaries, because these are going to be very expensive general election races. Texas, North Carolina. Someone quoted me, a Republican source quoted me, nearly $750 million, perhaps, in North Carolina as one of the most expensive races in the country.

You know, Senate Majority -- Minority Leader Chuck Schumer is working really hard to get recruits in some of these races. You know, Roy Cooper in North Carolina, Sherrod Brown in Ohio, potentially. But, yes --

RAJU: Yes.

CALDWELL: -- primaries could make that more difficult.

RAJU: And what about the debate within the Democratic Party about age, about generation? This is the age of some of the key Democratic recruits and hopefuls, including Janet Mills, who is governor of Maine, has not said whether she would run against Susan Collins. She's 77. Sherrod Brown, if he runs again in Ohio, 72. Cooper himself, 68 years old.

This is what one candidate, who's trying to challenge Jerry Nadler, the congressman from New York, what this challenger said about the Democratic Party and the age of its politicians.

(BEGIN VIDEOCLIP)

UNIDENTIFIED MALE: The Democratic Party is dying. We're losing votes.

UNIDENTIFIED MALE: The last eight members of Congress who have died, all of them are Democrats.

UNIDENTIFIED MALE: They're suffocating gerontocracy.

UNIDENTIFIED FEMALE: Older incumbents should step aside.

UNIDENTIFIED MALE: Losing elections.

UNIDENTIFIED FEMALE: Why are Republicans doing a better job of electing young leaders?

UNIDENTIFIED MALE: Losing our democracy.

UNIDENTIFIED MALE: Democrats are not taking this issue seriously, but they need to.

UNIDENTIFIED MALE: And the leaders who got us here are refusing to retire. With devastating consequences, the same people are using the same old tactics. But they're losing.

They're telling us to give them 10 more years in office, even as they say --

UNIDENTIFIED MALE: I'm not sure there's much we can do about it. We will have to wait.

(END VIDEOCLIP)

RAJU: And this is 26-year-old Liam Elkind against 78-year-old Jerry Nadler.

WEIGEL: Yes, different dynamic in a lot of these House races. We're going to see, for example, if Danny Davis in Illinois is going to run again. There are people like David Scott in Georgia who already have young primary challengers being explicit about that.

[12:55:08]

In these Senate races, Cooper is unique. I guess -- Cooper, he pronounces his name differently. Republicans have been kind of floundering in how they attack him because he's so popular. Mills is a different story. You've already seen people say, somebody have turned -- Jeanne Shaheen is retiring when she'd be the same age that Janet Mills would be if she gets elected to the Senate.

But even younger Democrats in Michigan, which is if -- Republicans are very optimistic about it. They've voided a primary there with Mike Rogers. These are -- there are three fortysomething Democrats all running for that seat. And it's not a generational issue.

RAJU: Yes.

WEIGEL: It is an anti-D.C., anti-Schumer issue in that primary.

RAJU: Very quickly.

RASCOE: Well, look, 68 for Cooper, that's young for the Senate.

RAJU: Yes.

RASCOE: Like, that's a spry young man, you know?

RAJU: Yes, exactly, exactly. Very good point, as I know full well from being up there every day.

All right, thanks for joining Inside Politics. CNN News Central starts after a quick break.

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