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New Day

Pandemic May Have Altered Economy; Four Charged in Smuggling Operation; New Polls on State Races; R. Kelly Gets 30 Years. Aired 6:30-7a ET

Aired June 30, 2022 - 06:30   ET

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

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[06:32:20]

BRIANNA KEILAR, CNN ANCHOR: The pandemic may have forever altered the economy. This is from the Federal Reserve Chairman Jerome Powell.

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JEROME POWELL, CHAIRMAN, FEDERAL RESERVE: Since the pandemic, we've been living in a world where the economy is being driven by very different forces. And we know that. What we don't know is whether we'll be going back to something that looks more like -- or a little bit like what we had before. We suspect that it will be kind of a blend, but our job is to find price stability and maximum employment, in the case of the Fed, in this new economy with these new forces. And it is a very different exercise than the one that we've had for the last 25 years. Nonetheless, the goals are the same.

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KEILAR: All right, let's bring in CNN chief business correspondent and "EARLY START" anchor Christine Romans and CNN business correspondent Rahel Solomon.

OK, explain this to us. What does he mean and how much anxiety should people feel when they listen to that?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: I mean, look, every crisis changes us, right? We were changed after the financial crisis, the real estate crisis of 2008-2009, we were changed by the dot-com boom. So we -- boom and crash, right? So, no question it will change us.

But what he's talk being are these forces, the astonishing snap back of consumer demand that has snarled supply chains around the world. He's talking about the invasion of Ukraine by Russia. That is a force that is a new force that will change the supply/demand picture for some time to come.

And I think what he's saying here -- and the ECB president, Christine Lagarde, said, we're not going back to those decades of super low inflation that we all enjoyed. These new forces mean that there will be price pressure on gasoline, on oil, on commodities, on food. I mean, it's been like a rolling set of supply/demand imbalances. There was baby formula. Now the airlines. I mean that's the new supply/demand imbalance. The supply is not keeping up with demand. We're just rolling through all of these new post-pandemic realities.

Rahel Solomon, CNN BUSINESS CORRESPONDENT: And then to add to that, also this idea that the last few decades companies have really leaned into globalization, right, as a way to keep prices low. And the last few years the pandemic has really made companies start to question, well, how vulnerable are our supply chains, right? I mean we've seen it with Ukraine, we've seen it with China every time there's a lockdown because of Covid, factories shutdown.

And so this idea that's really being questioned a lot by business leaders, is the way it's been working the best way it should continue to work, right? Or, do we start to rethink geopolitically and politically where we have our factories and start to consider, as Christine Lagarde said, are these political foes or are they friends? And so we're going to really see a reconfiguration perhaps about how companies do business.

JOHN BERMAN, CNN ANCHOR: Look, I understand a fraction of what the both of you understand with this, but when he said this, I was like, wow, I think this is a really big deal what he's saying.

[06:35:07]

Super long term what you're talking about. Also in the near term where he seemed to say the risk of high -- persistently high inflation, high prices is much bigger than recession, much more -- I would hate to see us more having inflation for a longer period of time he basically said than go into a recession.

ROMANS: But I've got to also say, that crystal ball over there at the Fed was really broken, you know, over the last year or so. So, you've got to take all of this with a big grain of salt. We don't know what's going to happen next. He's saying maybe -- we don't know what it's going to look like, whether it's -- we're going to go back to the way we used to be or whether there's a new set of factors, variables here.

What I do know is when I look at our 401(k)s, the market is very concerned about all of these risks. I mean the S&P 500, this year, down 20 percent. This is the worst first half of a year since 1970. We've never lived through this. The market is already kind of factoring in, I think, all of this uncertainty. And the fact that we may -- I talked to an energy analyst just last hour who said, look, for 20 years you had low inflation, you had a lot of gas and it was cheap. And we all got really used to that. We need to consider that that may have been the scenario of the last decade and it will not be the scenario of the coming decades.

KEILAR: Just really quickly, when he says, though, entrenched inflation is worse than an economic downturn, the first people who may be laid off, that is cold comfort to them because they're still dealing with inflation and an economic downturn. SOLOMON: Yes, I mean, it's a great point, in fact, that he did

reiterate yesterday that the likelihood that this will be painful is there, right, in the sense that they do have to manage inflation and that is going to make borrowing costs more expensive. And if you already don't really have a lot of wiggle room, you're getting hit on both sides, right. You're getting hit on the price pressures in terms of inflation. And so it will involve some pain. And I think that's what we've soon.

What they 're trying to do, and we've heard them talk about the dual mandate, right, maximum employment, full employment and price stability, is they're trying to figure out a sort of goldilocks, sort of temperature, right? How do we manage inflation but not trigger joblessness. And what he has said is that he feels like because the job market has strengthened to an unhealthy level, is how he described it at one point, there's so much demand for workers right now.

The hope is that if they do it just right, they can pull from the imbalance and the demand for workers without hopefully triggering joblessness.

ROMANS: Can I make one last point?

SOLOMON: Cross our fingers.

ROMANS: Yes, exactly.

Consumer balance sheets are pretty strong and so are company balance sheets, they're still pretty strong. We are entering this period of uncertainty in a better shape than we did the last few crises we've had. So I would just -- that would be my, you know, sort of like, let's not get too down about this because we are in -- we could get through it OK, you know?

SOLOMON: Here's hoping.

KEILAR: Thanks for the comfort, because we didn't get it from Jerome Powell, I'll tell you that.

All right, so the death toll rising in what is just -- I mean this is being called the worst case of human smuggling in U.S. history. Who police are now charging here.

Plus, disgraced singer R. Kelly sentenced to 30 years in prison for sex trafficking young women, including minors.

BERMAN: And an historic new chapter begins in the Supreme Court today as one justice retires and another, the first black woman justice, sworn in to replace him.

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[06:42:24]

KEILAR: This morning, four people are now being charged in connection to what officials say is the worst human smuggling incident in U.S. history. Fifty-three migrants died after being trapped inside of a semi-truck in sweltering heat.

CNN's Omar Jimenez is live for us in San Antonio with more.

Omar, what can you tell us?

OMAR JIMENEZ, CNN CORRESPONDENT: Well, Brianna, these are federal charges against four people allegedly tied to this incident. Among them, the driver, Homero Zamorano Jr. He's charged with smuggling undocumented immigrants resulting in death. Authorities were able to match his description after the truck passed through an immigration checkpoint to a person they found hiding at the scene as authorities first got there.

Another man was charged with conspiracy to transport undocumented immigrants resulting in death after allegedly having communicated with the driver about this smuggling.

If either of them are convicted, they could face life in prison or even potentially the death penalty.

Now, another two people were charged after -- with illegal possession of a weapon by someone illegally in the United States. They were found after authorities traced the license plate of the truck to an address here in the San Antonio area.

As we know, 53 people were killed as part of this. And the San Antonio police chief says when authorities first got there, the trailer -- the floor of this trailer was covered in bodies and authorities had to push through that to even potentially find survivors. Around ten or so of those survivors are still recovering this week. But as we learned from the archbishop of the diocese of San Antonio, many of them are still unconscious or can't even speak.

Of the dozens that were found dead, the Justice Department says 22 of them are Mexican nationals, seven from Guatemala, two from Honduras, and 17 of them are at least non-U.S. citizens as part of what has been a long identification process that's required coordination across multiple countries, and as part of what the Department of Homeland Security has described as the deadliest human smuggling incident in U.S. history.

Brianna.

KEILAR: It is horrific.

Omar, thank you for that update, live for u from San Antonio.

Ahead, we're going to peak with Bexar County, Texas, Sheriff Javier Salazar about where the investigation stands now.

Plus, five months out from the midterm elections, and a new poll shows a clear leader in the Georgia Senate race between Rafael Warnock and Herschel Walker.

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[06:48:52]

BERMAN: So Georgia is shaping up to be one of the key, if not the key swing state in the country. We saw it in the presidential and Senate races in 2020. In 2022 looking the same. And we do have some brand-new polling this morning from Georgia.

CNN senior data reporter Harry Enten is here.

This is a Quinnipiac poll. Let's talk about the governor's race first.

HARRY ENTEN, CNN SENIOR DATA REPORTER: I wasn't sure.

BERMAN: I wasn't sure.

Let's talk about the governor's race.

ENTEN: Taking that midnight train back from Georgia, not reading the segment beforehand.

OK, here we go. Choice for Georgia governor. The Quinnipiac University poll, 48 percent for Brian Kemp, 48 percent for Stacey Abrams. You don't have to be a mathematical wizard to know that is a tied race.

Now, I've also taken a Harry's estimate, which is essentially looking at all the polling recently, and that does show Brian Kemp a little bit more out ahead, 50 percent to 45 percent.

The question is whether this new poll is some sort of key in on a new state of the race or whether, of course, this -- these two results are kind of within the margin of error of each other, so it may just be that this is a better poll for Stacey Abrams than the average tends to be.

[06:50:01]

BERMAN: OK. In the Senate race, that split may play a bigger role.

ENTEN: Oh, I would say so. So, now we get to the Senate race. And what do we have here? Now, this, if this number -- numbers are correct and corroborated by other data, this would be quite the story because this is a key Senate race in terms of control. Remember, right now the Senate's 50/50 with the vice president breaking the tie. If Democrats can hold on here, their chances of holding on to the U.S. Senate go way up.

What does the poll show? Look at this. This is outside the margin of error. Rafael Warnock with a ten-point lead over Herschel Walker. You look at, again, my estimate, it's a closer race. But still, even here, Warnock is ahead 49 percent to 46 percent.

I'll be honest with you, John, when this race first started, even though there were a lot of people that were skeptical of Herschel Walker because of her tendency to make some controversial statements and his history, Georgia has historically been a red state even though Joe Biden won there by a very small margin back in 2020. I thought that Walker would overstate Warnock, but so far, whether you look at Quinnipiac, you look at the average, Warnock is holding on.

BERMAN: This is mostly post Supreme Court overturning Roe versus Wade. So, if you're a Democrat, again, you're thinking, oh, maybe there's some shifting here toward the Democrats, toward Warnock, or it could just be some noise in the polls.

ENTEN: That's a wonderful thing, right? We've got, as we march forward in time, we can never go backwards. We learn more and more and more. This is the first signal. Whether or not it's a signal or noise, we'll find out.

BERMAN: However, I will say -

ENTEN: Yes.

BERMAN: When you ask voters in Georgia what the most important issue is --

ENTEN: It ain't abortion. Just 10 percent of Georgia voters say abortion is the most urgent issue facing their state. Inflation. Inflation, inflation, inflation, still the number one issue at 41 percent. This, to me, is key, because I bet we'll see it corroborate in other polls. There's no reason to think that Georgia's different than the rest of the country with concern to this. Inflation, inflation, inflation. If Democrats were hoping to run on abortion and running pro-choice candidates in the fall and that could move races, this poll suggests that might not be the case.

BERMAN: All right, let's look at Wisconsin also while we're talking about this. Obviously, another key swing state.

ENTEN: Another key swing state. Another key state that has both a key gubernatorial race and a key Senate race. We'll start in the gubernatorial race where Tony Evers is the incumbent governor, the Democrat.

So, right now, if you look among all voters, Tony Evers has a 48 percent to 42 percent lead. An average over the leading Republicans. You can see that we have two that we've averaged here. But here, to me, is the key takeaway from this. We were talking about this, John, an enthusiasm gap. Is there an enthusiasm gap in the great state of Wisconsin. If you look at only the very enthusiastic voters, instead of a six-point lead for the Democrat on average, look at that, you got a 1 point lead on average for the Republicans. So, this could point to a problem for Democrats in the fall where there could be, in fact, an enthusiasm problem.

BERMAN: In midterms, obviously, you tend to see more enthusiastic voters dominating in the numbers there.

Let's talk about the Senate race in Wisconsin.

ENTEN: Yes, that - we'll take a look at the Senate race, which shows basically the exact same thing with that enthusiasm gap. Ron Johnson, the Republican incumbent, among all voters he has just a 1-point lead. That's well within the margin of error over the average of leading Democrats, you can see here, Lasry and Barnes. But if you look only among the very enthusiastic voters, look at that, that lead expands out to 4 points.

This is a race Democrats would love to take away from the Republicans. This poll suggests that that might be more difficult to achieve, even though Ron Johnson's favorables in those polls, no bueno, but it just seems to me to be a Republican year.

BERMAN: He's always been a target of Democrats, but always very resilient at the end of the day.

ENTEN: It always seems to me that Democrats underestimate him.

BERMAN: Harry Enten, thank you very much.

ENTEN: Thank you.

BERMAN: So, R. Kelly sentenced to 30 years in prison for sex trafficking women and underaged girls. What his victims are now saying.

KEILAR: And Pat Cipollone subpoenaed by the January 6th committee. Why they think his testimony could be explosive.

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[06:58:09]

KEILAR: Thirty years in prison. That is the sentence for disgraced R&B singer R. Kelly. A federal judge in New York sentencing the "I Believe I Can Fly" hit maker yesterday after he was convicted of sex trafficking and racketeering late last year.

CNN's Jean Casarez joins us with more.

Jean.

JEAN CASAREZ, CNN CORRESPONDENT: You know, Brianna, officially right now R. Kelly is with the U.S. Bureau of Prisons as a convicted federal and sentenced felon. Now, yesterday, during his sentencing, when it was announced, he was emotionless, he was obviously silent, but at the very same time, the survivors in the courtroom, they were together and they all held hands waiting to hear what that sentencing was.

Right after it was finished, everyone really came outside. I want you to listen to Jovante Cunningham. She was a former backup singer of R. Kelly. She was overwhelmed by the verdict.

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JOVANTE CUNNINGHAM, R. KELLY SURVIVOR: I started this journey 30 years ago, I was 14 years old when I encountered Robert Sylvester Kelly. There wasn't a day in my life, up until this moment, that I actually believed that the judicial system would come through for black and brown girls. Thirty years did he do this and 30 years is what he got.

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CASAREZ: And now the U.S. attorney for the Eastern District of New York, who prosecuted and then also R. Kelly's defense attorney, and this is right after the sentencing had been announced.

Take a listen.

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BREON PEACE, U.S. ATTORNEY, EASTERN DISTRICT OF NEW YORK: This is a significant outcome for all victims of R. Kelly and especially for the survivors who so bravely testified about the horrific and sadistic abuse they endured. R. Kelly is a predator. And as a result of our prosecution, he'll serve a long jail sentence for his crimes.

JENNIFER BONJEAN, ATTORNEY FOR R. KELLY: We were prepared for what the judge might impose, so it didn't come as a great big surprise.

[07:00:03]

We were prepared for it and we are now prepared to fight this appeal.

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