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U.S. Accuses Iran of Egregious Ceasefire Violation After Missile Launch; DOJ Launches Criminal Probe into Trump Accuser E. Jean Carroll; Inflation Rises to Highest Level in Nearly Three Years. Aired 10-10:30a ET

Aired May 28, 2026 - 10:00   ET

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

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PAMELA BROWN, CNN ANCHOR: Happening now, breaking news, the U.S. and Iran trading fresh attacks overnight with the U.S. accusing Iran of violating the ceasefire. New video into The Situation Room, we are live at the White House with what this all means for that fragile ceasefire and peace talks.

Plus, protesters clash with federal officials right outside the New Jersey ICE facility where detainees continue a days-long hunger strike over conditions.

WOLF BLITZER, CNN ANCHOR: And first on CNN, the U.S. Justice Department is launching a criminal investigation into Trump accuser E. Jean Carroll, and The Wall Street Journal once again becoming a target of President Trump's retribution campaign.

Also, $40 million worth of gold bars found inside a Virginia home. What we're learning about the man now under investigation by the FBI.

Welcome to our viewers here in the United States and around the world. I'm Wolf Blitzer with Pamela Brown, and you're in The Situation Room.

And we begin with the breaking news. The U.S. military confirming a new missile launch by Iran toward Kuwait, accounting to what it calls an egregious ceasefire violation. The U.S. military Central Command says Kuwait successfully intercepted the missile overnight hours after Iran deployed five attack drones threatening the Strait of Hormuz. All of this comes as the U.S. and Iran traded strikes overnight, casting new doubt over whether the country's fragile ceasefire will hold.

Let's go right over to CNN's Kevin Liptak at the White House. Kevin, lots going on right now, very dangerous stuff, what more are you learning?

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes. And it has seemed to put both the ceasefire and these negotiations in a very precarious position, Wolf. And just to run you through exactly what has happened in the Strait of Hormuz over the last 12 to 24 hours, the U.S. says that it detected Iran firing a number of one-way drones towards a commercial vessel that was trying to transit the strait. They took out the drones, and they also took out a ground facility that they said was preparing to launch an additional drone, and that has caused retaliation by Iran's Central Command saying that it fired a ballistic missile towards Kuwait. Remember, the U.S. hosts five military bases in Kuwait. That amounts to what Central Command is calling an egregious ceasefire violation.

It all, I think, leads to some questions about whether this ceasefire is actually holding. Certainly, the firing doesn't seem to have ceased. It actually seems to have been accelerating. Remember, this is just the second incident in this vicinity that has occurred over the last two days.

And when I talk to American officials, they seem to suggest that the IRGC is trying to demonstrate that it still has the ability to cause havoc in the strait. And, you know, remember, President Trump has said that Iran's military capabilities have been totally obliterated over the course of this conflict. I think this just demonstrates that Iran does still retain some very dangerous capacity in this waterway.

Now, President Trump yesterday suggesting he's under no pressure to reach a deal to end this conflict, and, in fact, threatened a different country, Oman, if they were to join in some agreement with Iran to try and control the strait, saying that he would blow them up if they did just that, an eyebrow-raising statement for what is quite a staunch U.S. ally in the Gulf. Wolf?

BLITZER: Yes, pretty dramatic indeed.

Our Kevin Liptak at the White House, thank you very much.

Also happening now, growing fears war could return very soon to Lebanon as Israel launches new attacks. This new video posted to social media today showing a large fireball rising from a building in the ancient city of Tyre after the IDF said it targeted what it calls Hezbollah infrastructure.

Further north, state media reported a deadly overnight strike on an apartment building in the country's third largest city of Sidon.

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The Lebanese Health Ministry says nearly three dozen people were killed in strikes yesterday, marking one of the deadliest days since last month's ceasefire between Israel and Lebanon took effect.

BROWN: All right, Wolf. Turning now to President Trump and his campaign of revenge. After successfully targeting his foes in politics, he is now doubling down on legal retribution. The Justice Department has launched a criminal investigation into E. Jean Carroll, the former magazine columnist who accused President Trump of sexual abuse.

It's a story first reported on CNN. Sources say investigators are focused on allegations that Carroll committed perjury in testimony tied to her civil lawsuits. Carroll was awarded more than $88 million from the two civil lawsuits.

And we're also learning this morning that the president has re-filed a defamation lawsuit against The Wall Street Journal. It seeks at least $10 billion in damages over its reporting on Trump's ties to convicted sex offender Jeffrey Epstein.

So, let's go live now to CNN's Kara Scannell. Kara, you were part of this team that broke the story on E. Jean Carroll. Tell us more about your reporting on the Justice Department's investigation on that front.

KARA SCANNELL, CNN CORRESPONDENT: Good morning, Pamela. Sources tell us that the Department of Justice has opened a criminal investigation into E. Jean Carroll. Sources say that this has to do with testimony that she had given related to those lawsuits she had filed against President Donald Trump.

According to sources, what they're looking at is a deposition from October of 2022. In that deposition, Carroll was asked whether anyone was helping fund her lawsuit. She had said no. Her lawyers raised this to the judge before the case went to trial, telling them that one mega donor, a Democratic donor, Reid Hoffman, the founder of LinkedIn, had actually provided some funding. So, Trump's lawyers took issue with this at the time, saying that Carroll had been lying.

The judge allowed them to depose her again, and then the judge ultimately said that he didn't see that there were issues that went toward Carroll's credibility, and he did not allow questions about that at the trial. But that seems to be the focus of this investigation, whether Carroll had lied during that deposition.

This is early stage of this investigation. Carroll's lawyers have declined to comment. But as you say, Pam, this is another example of Trump's Justice Department going after people that he has perceived to be their enemies, people that have brought lawsuits against him. Pamela?

BROWN: And we also know that he is re-filing this defamation lawsuit against The Wall Street Journal. Tell us more about that.

SCANNELL: Trump has re-filed this lawsuit. The deadline was yesterday for him to do so. This is the defamation lawsuit where he's seeking $10 billion. He's saying the Journal had defamed him by publishing a letter that Trump supposedly had written to Jeffrey Epstein. It's a lewd letter related to his 50th birthday.

Trump has denied writing the letter. He has re-filed this lawsuit, and his lawyers wrote, tens of millions of people have already viewed the false and defamatory statements published by defendants. Further, given the timing of the defendants' article, which shows their malicious intent behind it, the overwhelming financial and reputational harm suffered by President Trump will continue to multiply.

The Wall Street Journal, Pamela, says that they stand by their reporting. BROWN: All right. Kara Scannell, thank you so much. We do appreciate it.

All right, let's continue this conversation with our Senior Legal Analyst Elie Honig, a former state and federal prosecutor. So, Elie, what do you think about Trump re-filing this defamation lawsuit? Is this a strong case?

ELIE HONIG, CNN SENIOR LEGAL ANALYST: It's not a strong case, Pam, but what Trump has done now is exactly what the district court judge told him to do. So, Trump initially filed his complaint a few months ago. The district court judge looked at it and said, you haven't even alleged the things you need to allege to make a defamation suit here. You've not alleged that The Wall Street Journal acted with what we call actual malice, meaning they published something false and they either knew it was false or were reckless as to the falsity.

What the judge did was a little bit of a favor to Trump's team, and judges do this sometimes. He said, I'm going to dismiss it, but without prejudice, meaning you can go back to the drawing board and try again, and that's what Trump has done now.

If you look at the new complaint, they've added in language saying actual malice, but the proof just simply does not seem to be there. It does not seem to be the case that The Wall Street Journal, A, published something that was false, and, B, that they knew or were reckless about the falsity of it. So, newly packaged complaint, but I don't think it's any stronger than the original.

BROWN: All right. So, let's talk about E. Jean Carroll and this new case against her that the Justice Department is bringing. How hard will it be for prosecutors to prove this case, Elie?

HONIG: Well, perjury cases are deceptively difficult, I think, because prosecutors have to prove, of course, always beyond a reasonable doubt, first of all, that the testimony was false. Second of all, that the witness knew it was false at the time she gave it. So, here, they'd have to prove that E. Jean Carroll knew in 2022 at that deposition that she was receiving that outside funding and lied about it.

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And any ambiguity in the question or the answer can be a real problem for a perjury case, so you need a really clear record.

And finally, prosecutors have to show materiality. They have to show that the thing that the witness lied about was somehow important to a pending legal issue. I think here Trump's team would argue, well, if she was receiving outside funding, that was relevant to her motive. Trump's defense at the civil case was she essentially made it up to take him down politically.

So, those are all the different elements prosecutors have to prove, and, again, Pam, beyond a reasonable doubt is never easy, and I think it's especially so in perjury cases. BROWN: And do you think the court will look at this as part of the president's broader pattern here of targeting his perceived foes?

HONIG: Oh, for sure. If there is an indictment, E. Jean Carroll certainly will raise a selective or vindictive prosecution motion to dismiss. She will argue that the reason this prosecution is happening is because she successfully sued Trump twice and won verdicts amounting to $88 million against him. That is, in a sense, just in that context, it's a textbook case of vindictive prosecution. Vindictive prosecution means when someone is punished for exercising their legal rights or constitutional rights with a prosecution.

And this is a tough motion to win, but we just saw it succeed last week. Kilmar Abrego Garcia, who we remember the person who was wrongly deported, was then prosecuted, and he won. He got his case thrown out last week based on a vindictive prosecution motion.

BROWN: All right, good reminder on that.

Elie Honig, thanks so much.

HONIG: Thanks, Pam.

BROWN: All right. Wolf?

BLITZER: And still ahead, breaking news coming into the Situation Room. A new measure of the U.S. economy is just out. What this means for you and your wallet.

And later, a shocking story straight out of a movie, $40 million worth of gold bars found inside a Virginia home. What we're learning about the man now under investigation by the FBI.

Stay with us. You're in The Situation Room.

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BLITZER: Breaking news, annual inflation here in the United States is at its highest level in nearly three years, topping 3.8 percent just last month.

Let's go live right now to CNN Business and Politics Correspondent Vanessa Yurkevich. Vanessa, things have gotten a lot more expensive since last month, haven't they?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: That's right, Wolf. And prices have been rising for consumers. We now have two inflation reports that actually show that inflation has been rising and very quickly for U.S. consumers. We had CPI, which showed an annual rate of inflation of 3.8 percent, and look at this, PCE also now showing an annual rate of inflation of 3.8 percent. In March, we saw an inflation rate of 0.4 percent, but that is creeping up to 4 percent on an annual level. The target goal for inflation is 2 percent. This is a report that the Federal Reserve really likes to look at because it really gets into details of what people are spending on and the prices that they are paying. This report, when you look at it and just how fast that inflation has risen from 2.6 percent in January all the way to 3.8 percent last month, it makes the job of the Federal Reserve a little bit trickier because you have an incoming chair, a new chair, Kevin Warsh, who's going to be leading his first meeting in June. And, essentially, the president has directed him to cut interest rates. But that is nearly impossible with this report given the fact that if you cut interest rates, people spend more, and that only fuels inflation.

Talking about spending, spending in this report was up 0.5 percent in the month of April. That is actually a pullback from what we saw in March where people were spending upwards of 1 percent in terms of growth there. People are spending still on discretionary items, which is a good sign, and mostly things that they need to buy every single day, food, gas, utilities, things like that. There was a pullback in spending in this report, specifically on clothing, cars, and car parts.

Wolf, we also got new this morning the second reading for GDP. This was a slightly slower growth outlook than was initially reported. The first reading showed that the economy grew at 2 percent in the first quarter, this report now saying that it's actually 1.6 percent. You can see that on the right-hand side of your screen there.

It is an increase from what we saw in the fourth quarter of last year, where growth was at 0.5 percent, but it is out of that Goldilocks range. You want to see growth at 2 to 3 percent. What we saw here in this report, Wolf, was that there was a little less consumer spending, a little less investment than initially was reported. However, I do want to say, though, that it does still show the resiliency of the U.S. consumer, and it also shows that businesses are still willing to invest despite the war with Iran, despite higher prices, and despite the unknown, Wolf.

A lot of analysts do believe that we could still see economic growth moving forward this year despite the war because of those two key things I just pointed out, the resiliency, Wolf, of the U.S. consumer, and businesses still making investments in technology and artificial intelligence. Wolf?

BLITZER: All right. Vanessa Yurkevich in New York for us, thank you very much. Pamela?

BROWN: All right, Wolf. Coming up, a possible new search to find a missing American woman in the Bahamas. The new CNN reporting just ahead.

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BROWN: Happening now, the Trump Accounts app is live in the app store this morning, giving parents access to account balances, as well as the ability to make investing decisions. The accounts, however, won't officially be open for investment until July 4th.

So, let's go live now to CNN Business Senior Reporter David Goldman. So, David, help us better understand how these accounts work.

DAVID GOLDMAN, CNN BUSINESS SENIOR REPORTER: Yes. I mean, the government is going to give every child that was born after January 1st, 2025 $1,000 in an account that can grow over time because it'll be invested in the market.

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This addresses a huge problem in the United States, which is that people just aren't taking advantage of the growth that we've seen in the stock market. A lot of people are getting left out of that. This aims to address that problem.

Now, take a look, though, at what you could gain over the course of 18 years. With $1,000, if you invested nothing, and you assume a 10 percent rate of return, which is actually lower than we've seen recently, you come out with $5,500. But if you do invest the maximum contribution amount, which is $5,000 every year, it's almost a quarter million dollars.

Now, obviously, that advantages wealthier people because that gives them a leg up. But even if you don't put anything in and you come away with $5,500 maybe when you're at college level, that puts you in a much better position than so many kids are today when they're ready to go to college.

So, who can take advantage of this? Well, it's any U.S. citizen with a Social Security number that was born after 2025, and there are some rules around this, including you get a penalty if you withdraw early if you're not using it for something, like buying a new home or college, and it could act as a retirement account if you pull it out at 60, then you don't get that that, that penalty there. Really, really interesting new thing that's going to start on July 4th.

BROWN: Yes. It'll help a lot of families out, for sure. David Goldman, thank you so much.

GOLDMAN: Thank you.

BROWN: Wolf?

BLITZER: And new this morning, I'm quoting now, is this a stroke? Former First Lady Jill Biden speaking out about her husband's CNN debate performance that ultimately ended his re-election campaign. Her shock and her fear, that's next.

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