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DOJ Opens Criminal Investigation Into Fed Chair Jerome Powell; Border Patrol Agents To Minneapolis; Target: Tehran? Aired 12-12:30p ET

Aired January 12, 2026 - 12:00   ET

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

[12:00:00]

DANA BASH, CNN ANCHOR: An unprecedented threat and an unprecedented response. I'm Dana Bash. Let's go behind the headlines and Inside Politics. Now I know, I know we use that word unprecedented a lot. Some would say an unprecedented number of times. But right now, we are talking about President Trump's Justice Department opening a criminal investigation into the Fed Chair having to do with the multimillion dollar renovation project at the Central Bank's headquarters.

Now that news broke last night about the investigation, and it prompted a remarkable rebuke from the Central Bank chief.

(BEGIN VIDEO CLIP)

JEROME POWELL, FEDERAL RESERVE CHAIR: This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress oversight role. The Fed through testimony and other public disclosures, made every effort to keep Congress informed about the renovation project. Those are pretexts.

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)

BASH: Now the President is really open about his disdain for Powell, who, by the way, President Trump appointed in his first term. The President is consistently pressuring him to cut interest rates. He said this about the investigation last night to NBC News, quote, I don't know anything about it, but he's certainly not a very -- not very good at the Fed, and he's not very good at building buildings.

I'm joined by a terrific group of reporters. I mean, I don't know, I don't think his job is to build buildings. So maybe that's -- that's a fair criticism.

FRANKLIN FOER, STAFF WRITER, THE ATLANTIC: Every -- every contractor would be indicted if that was the cause, right. BASH: That's true. But, you know, I sort of joked about using the word

unprecedented so many times, but Frank, this is one of those moments we have to take a step back and remind people, this is not normal. This is not run of the mill Washington stuff.

FOER: It's not normal. And part of the reason it's not normal is that the Fed exists in almost this sacred space in our politics and our economics. It was created in 1913 to be -- to take interest rate setting out of the hands of politicians, because if we left management of the economy to politicians, they would print cheap money on the eve of every election, and they'd flood and we'd be stuck in a cycle of endless financial crises. And the Fed -- after the Fed was created, we basically removed bank runs and crises from our system.

They used to be something that happened every decade or so. That doesn't happen because -- and what makes this such an interesting test is that I think a lot of Trump supporters in Silicon Valley on Wall Street, they all know, in their brains, in their heart of hearts that maintaining the independence of the Fed is the ball game. It's the foundation of our strength in this economy.

BASH: Economic system.

FOER: Yeah, yeah.

BASH: Yeah, no question. Now that is -- nobody is saying, even those who are the most critical, that if there is something that is done that is illegal or untoward, that the -- that there should be an investigation. But as you just heard directly from Powell in that extraordinary statement, that is not what most think is actually going on.

In fact, just adding to this extraordinary evening and morning, the last, I guess, 12 hours, a group of former Fed chairs, you know, appointed by Democrats and Republicans alike, including Ben Bernanke, Alan Greenspan, Janet Yellen, and there were other treasury secretaries in economics who signed on to his statement and I'm going to read some of it right now.

This is how monetary policy is made in emerging markets and weak institutions with highly negative consequences -- consequences rather for inflation and the functioning of their economies more broadly. It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success.

[12:05:00]

ALAYNA TREENE, CNN WHITE HOUSE CORRESPONDENT: I mean, quite a statement from them and look, we've -- I think there's two things we're probably going to see come out of this, two reactions, at least I'm looking very closely at. One is, of course, how the markets are responding to this.

We've seen them down a little bit today, but how that -- how this continues, and if the market really does react in a way that sets off alarm bells inside the West Wing, because I'd remind you, the President has talked in the past repeatedly about wanting to fire Jerome Powell, and he was talked out of it by his top economic advisers.

People like Secretary of the Treasury, Scott Bessent. The other thing is, of course, what we're going to see with Capitol Hill. I mean, I thought one of the statements from Thom Tillis, the retiring Republican, him coming out and saying, essentially pledging to oppose any future Trump appointees for the Fed until this is resolved, is a huge deal.

BASH: Yeah. But one thing as well, I wanted to point out is just, you know, you read that quote from the President last night to NBC News saying, you know, insisting he doesn't have anything to do with this. Two weeks ago, when he was speaking publicly, he actually, kind of, you know, said that he believed a lawsuit was coming against Powell over this exact issue.

He called it, I have this quote here. He said, we're thinking about bringing a gross incompetence, what he said was called a gross incompetence lawsuit against Powell. That's, of course, catching a lot of people by surprise today when they're saying, you know, you're saying you have nothing to do with this, but you kind of, you know, led, or kind of gave a leading answer about some of this, unsolicited a couple weeks ago. And so, there's a lot of questions about what's actually going on behind the scenes.

BASH: And I just want to, because you mentioned Thom Tillis, I want to read a little bit more of what he said. This is Republican senator from North Carolina who has now said he's not running for re-election. So he has definitely been more clearly, felt more liberated to say what he really thinks. If there were any remaining doubt whether advisors within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none.

It is now the independence and credibility of the Department of Justice that are now in question. And then he went on, as Alayna said, to say that he's going to hold up any nominations, which is significant because Trump didn't fire Powell, but his term is up in a couple of months.

TOLUSE OLORUNNIPA, STAFF WRITER , THE ATLANTIC: Yeah, it is significant, in part because we haven't seen that level of backbone from Republicans using their power of advice and consent to hold the President and the administration to account. They have not used their ability to stop or block nominations, and they have not said, I will not continue with any of these presidential nominations unless I see what I need to see from the administration.

Thom Tillis is doing that. We saw from Senator Lisa Murkowski, essentially endorsing that approach, and we're waiting to see whether other Republicans are going to be willing to speak up, and the fact that President Trump's own nominee, Jay Powell, did release that video speaking out and saying, this is a pretext. This is not about a law that was broken.

This is clearly the President trying to exert influence over the Federal Reserve and take away the independence of the Fed, speaking in very plain language. It's pretty clear between Jay Powell and Thom Tillis that some people who previously may have not been willing to speak out are now willing to speak out, and we'll have to wait and see if more do that.

BASH: Yeah, let's see if anybody who's actually on the ballot this year does that. I do want to go back in time about six months ago, because there is a moment that deserves to be re-aired between President Trump and Jay Powell. It was July 24. Let's play it.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: It looks like it's about $3.1 billion, went up a little bit or a lot. So the 2.7 is now 3.1.

JAY POWELL, FEDERAL RESERVE CHAIR: Haven't heard about that.

TRUMP: Yeah, it just came out.

POWELL: Yeah, I haven't heard that from anybody at the Fed.

TRUMP: It just came out.

SEN. TIM SCOTT (R-SC): (inaudible) said it's 3.1 as well.

TRUMP: 3.1.

SCOTT: 3.1 - 3.2.

POWELL: This came from us?

TRUMP: Yes, I don't know who does that.

POWELL: You're including the Martin renovation. You just said -- you just added in a third building is what that is. That's a third building.

TRUMP: Yeah, but it's a building that's being built.

POWELL: No, it's been -- it was built five years ago. We finished Martin five years ago.

TRUMP: It's part of the overall work. So --

(END VIDEO CLIP)

BASH: I mean, it's kind of again in hindsight, when we when we saw it real time, it was kind of clear what the President was doing. But to take out a piece of paper with the cameras there to the Fed Chair while they're in hard hats, looking at this project that Jay Powell invited the president to come see, and basically saying, you're over budget. The president, he knows how to lay the groundwork.

JASMINE WRIGHT, WHITE HOUSE CORRESPONDENT, NOTUS: Yeah. I mean, just frankly, it's great TV, despite the fact that it is a deeply serious topic about the independence of the Federal Reserve. The President has been laying down the ground work for this in a lot of different ways.

[12:10:00]

When you talk to people close to him, they say very openly, just like the President has about how there is -- it's not just a professional animus against Jay Powell, but in some ways, a personal one, right, a feeling of rejection going against what the President believes those interest rates should be for a significant period of time.

This is not just happening over three months or six months, right? It's been years about these two kind of going at each other. I just want to say, though, that this conversation is also happening in the backdrop of this affordability politics moment, right? And when you talk to White House officials, they say that the President is really focused on two things heading into the midterms when it comes to the economy, of course, those lower energy prices, but housing.

The President has heard from a ton of different allies who basically tell him the way forward on this is to show the American people that you're doing something, trying to get more people to be able to buy houses, particularly young people. And of course, the Federal Reserve is really deeply tied into that with the interest rates, and so I think you're going to see them continue to pressure on this, whether or not the President comes out and says, you know, I did know this or not.

You know, that's obviously a big question mark. But so much of this is happening within the affordability conversation, and not just within this vacuum that we've seen in the last couple of hours.

BASH: Yeah, no, that's a really important point. All right, coming up, what can lawmakers do about this high stakes power struggle between the President and the Fed? Well, Democratic Senator Elizabeth Warren will be here live this hour. Plus the Homeland Security Department is sending more than a thousand additional border patrol agents to Minneapolis. That as there is still a lot of tension there since last week's fatal shooting of an American citizen by an ICE agent. We have details about what's coming next after a break.

(COMMERCIAL BREAK)

[12:15:00]

(COMMERCIAL BREAK)

BASH: The Department of Homeland Security is sending 1000 more immigration officers to Minneapolis. That will bring the total number of federal law enforcement in the area to more than 3000 and just to give a little bit of context, that is more than five times the total number of sworn police officers in the entire Minneapolis Police Department.

CNN's Priscilla Alvarez has been, of course, reporting on all of this and joins me now. First, what do we know about the latest surge planned in that city? PRISCILLA ALVAREZ, CNN CORRESPONDENT: Well, Department of Homeland

Security has been building on their presence there. So remember, they started sending agents to Minneapolis in December for what they called Operation Metro Surge. Now, after that, earlier this month, they deployed 2000 federal agents, as you just mentioned, and now 1000 additional U.S. Customs and Border Protection agents.

So that supplements the presence that Immigration and Customs Enforcement already had in that city and in that state and Dana, from all of the sources that I've been speaking to, this is sort of an unprecedented number of officers to send to one place, and what the plan for them is to continue the immigration crackdown but also serve other functions if necessary.

For example, last week, we saw them serve as a perimeter around the federal building where they do, for example, immigration processing. And it's also worth noting that this deployment, which started Friday and continued over the weekend, came on the heels of local officials in Minneapolis telling the administration they did not want them in their city.

Meanwhile, the response from the Department of Homeland Security is that they weren't going to go anywhere, and in fact, now they're going to send even more agents there.

BASH: Well, let me ask you, because I think you just kind of alluded this -- to this, but I want to put a finer point on it. Is the Department of Homeland Security sending these 1,000 agents because they think that there are enough undocumented immigrants that more agents are actually needed or is it more just to be a presence to make a point?

ALVAREZ: Well, it could be both. So the Department of Homeland Security says that they have already arrested 2000 people, starting in December. But certainly there are other places in the United States where they have similarly been trying to execute these immigration arrests of those who are in the country undocumented.

And what I have been told about this operation from the get go is that it was focused on anyone who was undocumented in the city or state. But the same time, this has always been politically charged, even in December, it always rooted back to the welfare fraud scandal that we also heard the Vice President talk about at the White House briefing last week.

BASH: Let me play a little bit of an exchange that our colleague Jake Tapper had with Kristi Noem, yesterday.

(BEGIN VIDEO CLIP)

JAKE TAPPER, CNN ANCHOR: What evidence are you looking at that so many other people around the country look at and they say it looked to me, her tires were turned to the right. She was moving her car, and they see a woman trying to flee. You say she was trying to kill the officer. No investigation has happened. What do you -- why are you so certain that your interpretation is the truth when an investigation hasn't even happened?

KRISTI NOEM, HOMELAND SECURITY SECRETARY: Jake, I'm watching -- I'm watching the videos. I'm talking to officers. I'm getting the facts.

TAPPER: Other people are watching the videos and coming to a different conclusion.

NOEM: Everything that we've stated as the Department of Homeland Security in this administration has been factual.

(END VIDEO CLIP)

BASH: Last week, when she first said that, like within minutes or maybe hours of this incident happening, you said you were hearing from sources inside DHS that they were surprised. What was the reaction after this interview?

ALVAREZ: It's a lot of the same, because this isn't the first time that there has been an officer or an agent involved in an incident that would require review by the Department of Homeland Security. We've seen this in the many years that DHS has been up and running, but each and every time there is an internal review, if not some other outside review, and it takes months, if not years. So even though the Secretary, who does have access to a trove of information, is drawing these conclusions.

[12:20:00]

Yes, there are some sources who say maybe she knows more than we do about this, but coming out publicly and drawing that conclusion is still a surprise, given that protocol has always been that there will be that internal investigation that will ultimately decide whether or not this officer did conduct himself in the way that training has prepared him.

BASH: Priscilla, thank you. Always good to see you. Appreciate it. Up next Target: Tehran. President Trump levels new threats against Iran and now the regime is reaching out, hoping to ratchet down tensions with the White House. We have some new reporting after a break.

(COMMERCIAL BREAK)

[12:25:00]

(COMMERCIAL BREAK)

BASH: To launch another military intervention or not? That is the question. President Trump says he's getting quote, hourly updates on Iran. 15 days into the Iranian demonstrations, more than 500 protesters have died, prompting the President of the United States to threaten military strikes. Listen to what he said overnight.

(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. I think they're tired of being beat up by the United States. Iran wants to negotiate. Yes. We may meet with them. I mean, a meeting is being set up, but we may have to act because of what's happening before the meeting.

(END VIDEO CLIP)

BASH: My panel is back. Alayna, you have a story up with our colleague, Kevin Liptak about the options that are being weighed inside the White House.

TREENE: Yeah. So the President has been briefed on a series of options over the past several days, and many of them, of course, are involving the military and direct military force. But there's also some that are not direct military force, and part of that is because, in my conversations with people at the White House, there is some concern among top administration officials about two levels of potential, you know, of that backfiring, of potential strikes, back firing.

One is that could galvanize the Iranian people who are protesting right now the Iranian government, to kind of support them amid strikes, but also there's concerns about retaliation, but it's something that the President is not leaving off the table. And of course, we've seen him, you know, warm up to military intervention across the world in recent weeks, and so this is definitely something he's considering.

But some of the non-military options as well include potential cyberattacks or sanctions. We know that they're also considering, you know, getting a Starlink to restore internet to the people of Iran. And so there's a lot of things that he's weighing. Now, what I will say as well is that the President, previously, he's been making this -- these types of threats for weeks now, it's actually January 2 was the first time he came out and said, we might have to send in the military to protect the Iranian people.

When he first made that threat, it was more of a threat, and he wanted to see how the Iranian leaders would respond. Now he is far more serious about this.

BASH: And the difference between then and now is the death toll and also what's happening in Venezuela. Because I think that we got to look at this in totality. Obviously the situations couldn't be more different, but it's about one of the goals that the administration said they had in what they did in Venezuela, not just in the Western Hemisphere but globally, is to show President Trump, you know, basically, don't mess with him.

WRIGHT: Yeah, he's reasserting what he believes should be America's power, not just in the West -- not just in our backyard, as they say, but across the globe. We have the story out in NOTUS, this morning, basically looking at whether or not it is the time again for neocons, right?

And they -- we pose a question to a lot of people on that, my colleagues who wrote it, basically asking, is President Trump moving closer to this neocon area where, obviously his supporters do not want him to go, and many people in it say, no, he's not there, but he's not as isolationist as I think people believe him to be based on maybe some of his campaign promises.

And so you're seeing this willingness to not just threaten, but as Alayna said, put -- put might and power between these pushes for people to basically do what he wants them to do across the globe. And I don't think you're going to see that stop anytime soon.

BASH: I mean, this is just -- look at the screen. This is just in one week, the President's global playbook. Iran, as you mentioned, weighing military intervention. Venezuela, we know what's going on there. He's controlling it, he says, after ousting Maduro. Greenland, he wants ownership. Cuba, threatening make a deal.

Just drilling down on, so to speak, on Venezuela, Alayna, you are getting some new reporting about an important meeting this week.

TREENE: Yes. So I was told by a senior White House official that the president, who kind of been, you know, teasing this, but not very specific. He's expected to meet with one of Venezuela's, of course, top opposition leaders, Maria Korean -- Corina Machado on Thursday at the White House. It's going to be a huge meeting, because there's a couple things to consider here.

Of course, one of the biggest is that when this capture of Maduro and also the strikes in Caracas happened, one of the first things the President said during that press conference was that he does not believe that Machado has enough support among the Venezuelan people to actually be the leader that they tried to put in place.

And so that was astonishing to a lot of people, including a lot of Republicans, who have been having a lot of conversations with the President about this in the lead up to that. The other thing is, what we actually heard from Machado last week, was what -- that she had said she hadn't talked -- she hadn't spoken with Trump, she told this to Fox News, since October. That was so remarkable to me.