Return to Transcripts main page

Inside Politics

Powell References Unemployment As He Hints At Rate Cut; Trump: "I'll Fire" Fed Governor Lisa Cook If She Doesn't Resign; Today: House Committee To Receive Epstein Documents; Think Tank To Dems: Stop Saying These Things. Aired 12:30-1p ET

Aired August 22, 2025 - 12:30   ET

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

(COMMERCIAL BREAK)

[12:31:42]

DANA BASH, CNN ANCHOR: Right now, a very happy Wall Street. The Dow is soaring into record territory after Federal Reserve Chair Jerome Powell forecast changes could be on the way. Listen.

(BEGIN VIDEOCLIP)

JEROME POWELL, FEDERAL RESERVE CHAIR: Risks to inflation are tilted to the upside and risks to employment to the downside. The baseline outlook and the shifting balance of risks may warrant adjusting our policy stance. Monetary policy is not on a preset course. FOMC members will make these decisions based solely on their assessment of the data and its implications for the economic outlook and the balance of risks. We will never deviate from that approach.

(END VIDEOCLIP)

BASH: That last part, pretty clear Powell coded message to the White House. We, the Federal Reserve, call the shots.

My smart reporters are back, including CNN's Phil Mattingly. Hi, Phil. You travel the country. You talk to normal, real people outside the Beltway all the time. Talk about what this could mean for people out there and their lives, but also what it could mean for them politically.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: So Donald Trump is back in the White House. The biggest reason is because he promised he would lower your costs. And when you travel the country, yes, it's food prices. Yes, for some people, it's energy prices.

But one of the things that even people who are doing pretty well and who can survive inflation is interest rates because they might own a home and want to buy a home across the street because they've had two kids in the last five years. They want to buy a bigger house, but they can't. Even though they could sell their house at a pretty good profit, they can't afford in their own neighborhood or the neighborhood up the road because of interest rates.

So if there is a rate cut, rates cuts are stimulative. Rate cuts help the economy. Now, the Fed chairman also said tariffs are hurting the economy --

BASH: Right.

KING: -- in some ways and prices. So it's a very mixed message. But on the simple question of a rate cut, that would help a lot of people who have been trying to move up in this economy. Rent prices are still too high. A rate cut's probably not going to do that.

But it would be some juice for Donald Trump and some juice potentially for the Republicans at a moment. If you're looking at the data this morning, midterms are a long ways off. They need that juice. The Republicans do.

BASH: And Donald Trump knows this -- I mean, the reason why he's attacking Jerome Powell all the time may be because he doesn't like him, but it's really because he understands --

KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: It's all about the interest rates.

BASH: -- the interest rates need to go down for --

HOLMES: Yes, and he --

BASH: -- the economy to get better.

HOLMES: He's been clearly trying to strong arm him into lowering the interest rates. Powell has held his ground saying, again, we are the ones who make this decision. But we've seen a maximum pressure campaign on not just Powell, but also on his board of governors at the Federal Reserve.

I mean, they are trying everything in their power to try and manipulate the system to get more Trump loyalists in, to have Powell feel pressure and resign, anything they can. Of course, as we've reported, you know, he has been warned not to fire or attempt to fire Powell. So this is now their pressure campaign around that.

BASH: So you've been doing some excellent reporting on that last part, specifically Lisa Cook, who is a member of the Federal Reserve Board. Quickly, let's just listen to what the President said this morning about her.

(BEGIN VIDEOCLIP)

UNIDENTIFIED MALE: Are you going to fire Lisa Cook, the Fed governor over her --

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Yes, I'll fire her if she doesn't resign. Yes. She's -- what she did was bad. So I'll fire her if she doesn't resign.

(END VIDEOCLIP)

BASH: Explain.

PHIL MATTINGLY, CNN ANCHOR & CHIEF DOMESTIC CORRESPONDENT: This would be a really big deal.

[12:35:00]

And I think to Kristen's point, you know, the President has backed off kind of his calls or the potential for firing Jerome Powell. His advisers have made very clear this is a bad idea. We don't think you necessarily have the legal authority, especially because you don't have cause to do so, which would be the only way the President would have that authority. And it would be catastrophic for a market that he really relies upon for the broader macro economy.

Lisa Cook is a different story in the sense that one of his kind of top allies, attack dogs, Bill Pulte, the director of the FHFA, sent a referral to the Justice Department related to what he says are the improper documentation of primary mortgages, which he says -- or alleges would constitute mortgage fraud.

The Justice Department, run by another -- this section run by another very close Trump ally, sent a letter to Jay Powell alluding to the fact that they are starting an investigation here. Pulte says this is cause. And if there is cause, then the President would have authority.

Here's -- there's two parts of this that I think are really important. I'll try and get through them quickly. One, the idea of what constitutes cause is very ambiguous. And going down this path of firing a Fed governor is also going to have an effect on the market, which I think the President and his team will be cognizant of.

The reason why they are willing to pursue this, whether just purely for pressure or because they actually want termination, is there is an open seat right now from a governor that left early that will soon be filled when the Senate votes to confirm Stephen Miran, the President's top economist. If Lisa Cook were to leave, that would open up another seat. The President would get to appoint another official.

If that happens, the President would have a 4 to 3 majority on the Fed board, the Fed governors. That's operational control of the Fed. That's budgets. That's process. That's how they do research. That also gives them control over the Federal Reserve Bank presidents, five of which, of the 12 on a rotating basis, vote with the Federal Market Committee on interest rates.

This would be a major, major deal. And I think that's why you see the President so keen on pursuing it right now.

BASH: Yes. That's such a good explanation.

As we go to break, I do want to say Lisa Cook, who maybe it was clear, was a Biden appointee. Here's what she said in a statement. "No intention of being bullied to step down from my position because of some questions raised in a tweet. I'm gathering the accurate information to answer any legitimate questions and provide the facts."

Up next, the Epstein files get turned over today. What will we learn? What will they say? Stay with us.

(COMMERCIAL BREAK)

[12:41:54]

BASH: Today, the Justice Department is set to begin turning over documents from the so-called Epstein files to Congress. But does that guarantee the Republican leaders in the House will be fully transparent about the files? House Oversight Chair and fellow Kentucky Republican James Comer tried to reassure his colleagues yesterday.

(BEGIN VIDEOCLIP)

REP. JAMES COMER (R), HOUSE OVERSIGHT CHAIRMAN: We're going to review and we'll work as quickly as we can. We, you know, this is sensitive information. We want to make sure we don't do anything to harm or jeopardize any victims that were involved in this. But we're going to be transparent and we're doing what we said we would do. We're getting the documents and I believe the White House will work with us.

(END VIDEOCLIP)

BASH: My smart reporters are back here. Kristen, what are you hearing from your White House sources about all this now?

HOLMES: Yes, so one of the things that we had heard was that, remember, we were reporting that there was this audio of the Ghislaine Maxwell and Todd Blanche interview with a transcript that they were talking about releasing. This is when they were trying to get ahead of this. They had been on the defensive about the Epstein case for weeks and could just not get around it.

So they were looking for ways to say, look, we're being transparent. We might release this. Since then, they have backed away from it because America has backed away from it. And I will tell you, part of this was a CNN segment that was done on how the search for the Epstein files had dipped down that we did. That was circulating among White House aides and staffers.

And they decided, the White House as a whole, that maybe this wasn't the right time to be putting stuff out there. Now, that's still everything is still on the table as potential to get out there. But it just goes to show you how much calculus is in all of this. They are thinking about every single thing.

And when it comes to Comer and the Oversight Committee, he says, I hope the White House will work with us. We know that Comer is in constant contact with the White House. In fact, the White House is who told me that Comer was issuing a subpoena the next day before Comer announced it.

BASH: Wow.

HOLMES: So they are working in lockstep because Comer is a huge ally of President Trump's and always has been.

BASH: So, yes, the -- I would argue that the American people writ large, they were not chomping at the bit for the Epstein files to begin with. It's a very specific subset, a sub-subset of the population who consume media in which the President and even more so his allies, who are now at the highest levels of government, were spewing conspiracy theories about what Epstein did or didn't do.

And that is still definitely the point of view of people who are on Capitol Hill. And so I'm not sure that they're going to let this go. I'll just give you one example. I spoke with Tim Burchett, who's on the Oversight Committee, earlier this week on the show.

(BEGIN VIDEOCLIP)

REP. TIM BURCHETT (R), TENNESSEE: It disgusts me, really, because you've got people whose lives have been ruined, and they will never ever regain a sense of community because of these dirtbags. And I would hope that we could punish them as quickly as possible and get to the bottom of this.

[12:45:00]

BASH: It disgusts you that Trump's Justice Department isn't releasing it? What disgusts you?

BURCHETT: No, ma'am, it -- well, we didn't, under Joe Biden, either. He had it for four years. And that's why I really don't think there's much about Trump in there, because I figure President Biden would have released it as well.

(END VIDEOCLIP)

BASH: Billy says he wants to see it and he wants it released.

KING: And so the question is, does the Oversight Committee process pass the smell test? Not just for reporters, not just for the Democrats who will, you know, fight against for the -- against the Republican majority, no doubt, over what do we make public and how do we do it. But Comer's subpoenas in this case did not include Donald Trump or Melania Trump or anybody at Mar-a-Lago, people who would know this.

It was mostly Trump critics who he subpoenaed. We'll see where it goes from here. But you mentioned that subset. Donald Trump has had a problem. Republicans have had a problem in elections which Donald Trump is not on the ballot. I gave you the 2018 midterms, which brought Nancy Pelosi into the speakership.

That is the question for next year. Will the Republicans, who have an even smaller majority heading into next year than they did heading into 2018 be able to keep it? If Trump voters stay home because they are mad at him or mad at Republicans or mad about anything, mad about the weather, then that increases the Democratic chances. And this is an issue that matters passionately to them. And they think this is really interesting. Most Trump voters do not criticize him. A lot of them are criticizing him about this, not just his people, him. They say he promised us this. We want to see it.

BASH: And to their credit, most of them say this is because it's about real people. And I want to give an example of that. This is Amanda Roberts, who's the sister-in-law of the late Virginia Giuffre, who was an Epstein victim.

(BEGIN VIDEOCLIP)

AMANDA ROBERTS, SISTEN-IN-LAW OF VIRGINIA GIUFFRE: We're very wary that this may be just another move of the Department of Justice, right, where they're saying they're going to do one thing, but then their actions are showing a completely different thing. And so to kind of leak these documents where people are implicated that are heavily, you know, redacted, you know, one time at another, that's not really full transparency.

(END VIDEOCLIP)

BASH: Alyse?

ALYSE ADAMSON, FORMER FEDERAL PROSECUTOR: Yes, I mean, this is about real people. There's over 1,000 victims of child sexual abuse, and sometimes that gets lost in the narrative. And I think that's what we're hearing the families of the victims say more and more. That the longer this takes to get out to the American public, the longer these folks are really re-victimized.

And so we've heard the Department of Justice say that it's going to take a long time to redact all of these documents, that victim information is so intertwined with the investigation that they have to release these entranches. So, yes, we're going to see some documents today, but this is probably going to be over the course of several weeks, if not months. And what about the victims? That several weeks and months that they need to continue to be in the headlines.

MATTINGLY: I think often about the movie "Up," really great animated film, I believe it's from Pixar. There's a dog in it, where whatever he's focused on, if somebody says squirrel, he immediately shifts his attention away and completely loses focus on whatever that is. I feel like this entire process from the Trump administration is just saying squirrel over and over again. Like, oh, we're going to go and see if we can get grand jury testimony released.

We know that's not actually going to happen. We're going to turn over a bunch of stuff to the Oversight Committee. We know they're on our side. And there's probably I think the underlying rationale may be because there isn't what supporters think is there that actually exists.

And this is very complicated because of victims, because of redactions. But it just feels like we're going to be playing that game of squirrel for a long time. It's a great movie.

BASH: Good analogy.

Up next, Democrats are playing word games for 2026. We'll explain what that means. You're going to want to see this.

(COMMERCIAL BREAK)

[12:53:06]

BASH: Now some very specific advice for Democrats. Democratic think tank Third Way wants Democrats running for office to screw up their vocabulary. To boil the message down to its essence, it's basically this. Don't sound woke. The memo is titled, "Was it something I said?" And cautions Democrats to avoid 45 words and phrases.

At all, if they can, or if they don't, they're going to risk making the Democratic brand even more toxic to voters. This is what this memo says. Here are just a few of the 45 that they say should be banned. Triggering, safe space, holding space, food insecurity, unhoused, pregnant people, chest-feeding.

My panel is back.

KING: This is a safe space.

BASH: Banned.

KING: Look, you know, is that specific list going to do it? I don't know. But when you travel, number one, a lot of people used to be Democrats who are now Trump voters, they do think the Democratic Party speaks a different language. They think the Democratic Party does not speak to them about that factory up the road is closed. Or the changes in their neighborhood that they don't like.

So I do think any politician, anybody in the news media should speak a language that is relevant to people out there. Not people who live, forgive me, in New York or San Francisco in a big urban center. I'm not criticizing urban centers. I'm from one. But I do think people in Middle America think that the elitists have lost their way and speak a language they don't understand.

BASH: Mr. Ohio?

MATTINGLY: The equation (ph) of Overton window is a bridge too far for me. That is very relevant. It's not a triggering word. Look, I think if you talk to Democrats publicly, they'll probably -- and we've seen it over the course of the last couple of hours, are ripping this idea and criticizing Third Way and all that type of stuff. Privately, they would tell you we have, especially elected officials, like younger people on our staff that have put this language into press releases, have kind of made this a thing.

If you remember the 2020 primary, Democratic primary, there were like things that people would say that probably wouldn't resonate with any of us. And then all of a sudden they'd get attacked for saying something they weren't supposed to say anymore. It was tough to keep track on some level. [12:55:08]

I think it's real. I don't know whether this list is the answer. I can pretty much guarantee it's not. But it's a real thing.

HOLMES: I do think there's something more overarching about all of these. And it goes to what you were saying earlier about when you talk to people across the country, what is it that they mostly care about? They care about their family, their community, and their wallet.

And if you are not focusing on those issues, and instead you're focusing on what could largely be considered micro-issues, there tends to be a general consensus throughout the country, actually, you don't care about me. You care only about this small sect of people. And the messaging when it comes to the economy, for example, is one that really both sides can get on.

And when you start using these terms that, again, affect a very small group of people and get away from the things that everyone cares about, they start to think you only care about that small group of people. And I think that might be where the messaging is lost, is taking less focus on this and more on what do people actually need at home.

BASH: So interesting.

Thank you all. Have a great weekend.

Thank you for joining Inside Politics. CNN News Central starts after a quick break.

(COMMERCIAL BREAK)