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What We Know with Max Foster
New Photos Released From Jeffrey Epstein's Estate; E.U. Deciding Whether To Use Russia's Frozen Assets For Ukraine; Trump's Handpicked Board Votes To Rename Venue "Trump Kennedy Center"; Investigation Into Potential Ties With MIT And Brown Shootings; Australia's P.M. Announces New Antisemitism Measures; Investigating Claims Of Russian Spies In European Waters; U.S. Inflation Cools To 2.7 Percent in November. Aired 3-4p ET
Aired December 18, 2025 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:27]
MAX FOSTER, CNN HOST: A new batch of photos from Epstein Island.
This is WHAT WE KNOW.
On the eve of the deadline congress set for the Justice Department to release all the Jeffrey Epstein files, House Democrats have just released a
new batch of photos from the estate of the convicted sex offender. It includes a text exchange listing details about an 18-year-old woman from
Russia asking if it might be, quote, "someone good for J?" It's not clear who J is or who sent the message or to whom. We're not getting much context
about any of these releases.
There are more celebrity photos as well, including one with a philanthropist, Bill Gates, and Epstein, alongside a philosopher, Noam
Chomsky.
All this as the U.S. Justice Department faces that Friday deadline to release files related to its investigations into Jeffrey Epstein.
(BEGIN VIDEO CLIP)
REP. ROBERT GARCIA (D-CA): Anything that has been put out by the committee or by Democrats on the committee has been essentially the document sent to
us by the estate, which will continue to put out. I wish that the Republicans put as much energy into trying to conceal and hide and cover
up. That amount of energy that they put into that I wish they would put into actually demanding the president release all the files. The reality
is, the president could end this all tomorrow, tonight, by releasing every single file.
(END VIDEO CLIP)
FOSTER: Annie Grayer is on Capitol Hill for us.
You've been looking through these images. I mean, what strikes you about them? What can we learn from them?
ANNIE GRAYER, CNN SENIOR REPORTER: Well, we don't have a lot of context around these photos. We don't know who took them or when or any, any
descriptors about these photos. What we do know is that there's been at least 60 that have been released today. We are still going through some of
them. They're from Jeffrey Epstein's estate.
Democrats have made a point to try and release photos as quickly as they can. The committee has 95,000 images that they're going through. Now, some
of the photos that were released today include the image of a woman, parts of a woman's body with quotes from Lolita on it, which is from a -- is a
Republican novel that is discussed as an obsession with a 12-year-old girl.
There's photos with philosopher Noam Chomsky and Jeffrey Epstein appearing to be on a plane. There's a photo of Bill Gates appearing with a woman
whose face has been redacted. There's passport photos from different countries that appear to belong to various women, and these are all just
providing fresh intrigue around who was in Jeffrey Epstein's inner circle and kind of trying to shed more light on Epstein's relationships.
Some of the most powerful men in the world. These photos all come after the Democrats and the committee released last week. Dozens of photos of
Epstein, with some another batch of very powerful men, including President Trump. But all of these photos come as we are waiting to see if Department
of Justice is going to comply with that. December 19th deadline to release all of the photos that it has in its possession that was mandated by law
from Congress that passed in both the Republican-led House and Senate and signed into law by President Trump.
So, we are -- Democrats are continuing to put pressure on this issue, as we are waiting to see if DOJ complies with that timeline.
FOSTER: Okay, Annie, appreciate it. Thank you.
The E.U. holding a critical summit on the war in Ukraine and, foreign policy chief, Kaja Kallas, says we just can't afford to fail. E.U. leaders
are debating whether to use billions of dollars in frozen Russian assets to continue funding Ukraine. The plan is to loan Ukraine the money until
Russia pays reparations for the war. The E.U. has committed to funding Ukraine for the next two years regardless. So, if the proposal fails, the
money must come from somewhere else.
The assets are worth some $246 billion. Amongst those attending the meeting in Brussels was the Polish prime minister, Donald Tusk. He told reporters
not funding Ukraine today will affect all of Europe tomorrow.
(BEGIN VIDEO CLIP)
DONALD TUSK, POLAND PRIME MINISTER: Now we have a simple choice either money today or blood tomorrow, and I'm not talking about Ukraine only, I'm
talking about Europe. And this is our decision to make, and only hours. I think all European leaders have to finally rise to this occasion.
(END VIDEO CLIP)
FOSTER: So, what exactly is on the table at these talks?
Well, back in 2022, the European Union took control of Russian Central Bank money being held in European banks. Those assets total about $246 billion.
[15:05:02]
And now the European Commission wants to lend about a third of that to Ukraine's war effort. The issue is that might not even be legal. Belgium
has said that it might be too risky, and other countries worry it might put countries off from investing in Europe.
Let's get more now from Clare Sebastian in Brussels.
I mean, Brussels, it does set a principle, doesn't it, which might be difficult for other cases, but also Russia could claim against Belgium.
Belgium is under the pressure here.
CLARE SEBASTIAN, CNN CORRESPONDENT: Yeah. And that's been the argument from Belgium all along, Max, is that they face disproportionate risks because
the bulk of these assets are held in Belgium, here in Belgium at Euroclear. And we've already seen Russia file a lawsuit. Russia's central bank filed a
lawsuit against Euroclear, and then Russia's central bank came out again today and warned that it would seek damages from any European financial
institution that was involved in what they called the illegal confiscation of these assets.
Now, that language is important because Europe is not using the word confiscation. They have argued that this would be legal because it's
reversible, right? What they're proposing is a reparations loan whereby some of this money gets loaned to Ukraine, but it's paid back if the war
ends and Russia pays reparations, obviously Russia is trying to reinforce its deterrent against that with these threats.
But look, what's happening now is that we know that the debate has started on this central issue of Ukraine financing. Theres been a lot of work going
on in the lead up behind the scenes. As of this morning, though, Belgium said that it hadn't seen a document from the E.U. yet that met its
concerns.
And meanwhile, we've had President Zelenskyy here from Ukraine making a really powerful pitch about why Ukraine needs this money now, he said they
would face a 45 to 50 billion euro. That's nearly $60 billion cash shortfall in next going into next year. If they didn't get another chunk of
money from the European union, that would eventually mean they'd have to cut drone production, which is obviously critical to the war effort. So,
they need the money, they need clarity.
And of course, if they go into the next round of peace talks with the U.S., which we know now will start on Friday with no clear plan on how they're
going to fund their defense through next year. That, of course, weakens their position in talks. So, the timing is absolutely critical.
But I think also, as you heard there from Donald Tusk, that this is not just about Ukraine. Europe needs to show that it can stand up and take
responsibility really for its own security, as it has said it would do. And of course, this is not just a hypothetical issue, certainly for countries
like Poland, which just three months ago had to scramble jets to shoot down Russian drones over its own territory.
So there's a huge amount at stake here, Max, and European leaders have made it clear at least the heads of the European institutions, that they do not
want to leave here without some kind of clear offer on the table for Ukraine.
FOSTER: They need that clarity, don't they? Because you know, the Americans, the Russians probably looking at what's going on, saying they're
so chaotic, they're very difficult to deal with in the peace talks that are coming up this weekend.
SEBASTIAN: Well, exactly. And Ukrainian President Zelensky said it outright. He said we'll be more confident in these peace talks if we have
these assets. What he meant, of course, was the loan represented by the cash balances associated with these assets.
But I think that is very clear. And again, for Europe as well, it's facing obviously a very hostile Russia on one side and then an extremely critical
United States. That criticism enshrined now in black and white in the national security strategy that came out earlier this month and comments
that followed from President Trump describing Europe as weak and decaying.
Look, the diplomats that we've spoken to here have said that that's not on their mind, that they simply need to do this for Ukraine and their own
security. But I think certainly there is an awareness that the U.S. is watching, and certainly so is Russia -- Max.
FSOTER: Okay, Claire, thank you so much.
Elsewhere in Brussels, hundreds of tractors rolled into the center of the city today, part of a farmers protest against the E.U.'s planned trade deal
with the South American bloc, Mercosur. Some protesters set off fireworks, hurled bottles outside the European parliament. Police fired tear gas to
try to clear the crowds.
Now, E.U. leaders are considering whether to sign that deal with Argentina, Brazil, Paraguay and Uruguay. It would create the world's biggest free
trade area and some of Europe's farmers fear they would be undercut by a flow of cheaper goods.
A hallowed American institution may be about to be renamed for Donald Trump. Just a short time ago, the board of the Kennedy Center for the
Performing Arts said it had voted to change its name to the Trump Kennedy Center. The board says the vote was unanimous and claims Trump saved the
organization from financial ruin. The Kennedy Center has been around since 1971 and is the home of the National Symphony Orchestra, as well as hosting
numerous theatrical and musical performances.
CNN senior White House reporter Betsy Klein joins us now.
Presumably, Trump's going to see this as a as a great thing, but what does the wider cultural world make of it?
BETSY KLEIN, CNN SENIOR WHITE HOUSE REPORTER: Right. There are a lot of questions and concerns, but the president says that he is honored and
surprised by this decision. The president has been calling it jokingly, the Trump Kennedy Center for months now, but his hand-picked board has made
that wish come true.
We are learning that the John F. Kennedy Center for the Performing Arts is going to be renamed the Donald Trump and John F. Kennedy Center for the
Performing Arts, and this marks President Trump's latest move to impose his style and tastes both on the nation's capital as well as American culture
more broadly. The vote took place during a board meeting, according to a source familiar with that meeting, President Trump himself called into that
meeting for much of it, and a reminder that the president had eliminated the existing bipartisan board of trustees and installed a group of
loyalists just weeks after taking office. That board elected him chair of the board in February.
But we heard from Roma Daravi, who is a spokesperson for the Kennedy Center. She says, quote, "The Kennedy center board of trustees voted
unanimously today to name the institution the Donald J. Trump and the John F. Kennedy Memorial Center for the Performing Arts. The unanimous vote
recognizes that the current chairman saved the institution from financial ruin and physical destruction. The new Trump Kennedy Center reflects the
unequivocal bipartisan support for America's cultural center for generations to come."
But, Max, there are a lot of legal questions about whether they can do this. This is a memorial to a former president. Federal law requires that
no additional memorials or plaques be designated or installed in the center's public areas.
And we heard from Congresswoman Joyce Beatty, who is a Democrat. She is an ex officio member of the board, which means she does not have a vote. But
she was a participant in that board meeting. She said she repeatedly tried to raise concerns and object to this during that meeting, but she was
participating remotely and she was repeatedly muted. She called this just another attempt to evade the law and not let people have their say.
But we've seen the president reshape the Kennedy Center -- the Kennedy Center's leadership. He secured a $250 million set of federal funding to
renovate it. He also has reimagined the scope of its programing. This just the latest attempt to place his mark on that center.
FOSTER: It's interesting. Betsy, thank you for joining us from the White House.
Now, a law enforcement official close to the case of the Brown University shooting says police are looking into potential ties between that attack
and the killing of an MIT professor at his home near Boston. The 47-year- old physicist was shot Monday night, two days after a gunman killed two people and injured nine others at Brown University. Now, police have not
named a suspect, but they are seeking information about a person of interest seen on surveillance video. And anyone who may have come into
contact with them. We're expecting an update from officials on the investigation in about an hour, so it will be interesting to hear from
them.
John Miller joins us now with more on the investigation.
I'm fascinated by this link between these two cases, John, because the professor, this world authority on nuclear fusion, which could potentially
change the way the world operates two days later being killed after the Brown shooting and whether or not there might be a link.
JOHN MILLER, CNN CHIEF LAW ENFORCEMENT AND INTELLIGENCE ANALYST: So investigators said a couple of days ago when they were asked, do you see a
connection between these two killings within the academic world of the northeast United States that they had consulted with the Massachusetts
state police, to the FBI, to the Providence police, and that they saw no connection? They were likely not connected.
Now, that being said, in the past 24 hours, a couple of threads, one in particular developed between the two cases that they thought they are
looking into to see if they're connected. Because of the sensitivity of the two matters, they don't want to get into what that connective thread might
be. But since they had gone on record saying they weren't connected, it's interesting that they are now comparing information in the two cases to see
if a link can be made because of certain information that came up.
Now, Max, you know, from your own experience this could pan out and join the two cases together and we could have a much more dynamic situation of a
gunman who's traveled between two places with distinctly different targets within the academic world. But we also understand from our shared
experience in these things that that could all wash out and the connection that they looked at could just be a coincidence.
FOSTER: But already people are going to be making their own connections, John, and you're the expert here. Just put us into context here. What sort
of connections could we be talking about? It might not be the same killer. It could be some sort of other link, right? Just take us through the
possible connections police would be considering.
MILLER: Well, I actually, can't really get there from what I was told.
[15:15:05]
And I think there's a level of sensibility to that because I think the investigators really want to keep those cards close to the vest, because
the only person who is going to know whether that connection is positive or not are the investigators, if they make it, or the killer if he hears this.
So, I think they're being very guarded about that. But I also believe we will probably know the answer to this by the end of the day.
FOSTER: Okay. I really appreciate it, John. Absolutely appreciate everything you said there. Thanks for joining us.
MILLER: Thanks.
FOSTER: Meanwhile, the FBI's number two position will be soon vacant it seems. Deputy Director Dan Bongino has announced that he will leave the
agency in January. This after eight months marked by clashes with his boss, Kash Patel, and Attorney General Pam Bondi. Bongino came into the job after
a lucrative podcasting career where he vocally supported Donald Trump and fueled conspiracy theories. He had expressed frustrations about how the
Department of Justice handled the aborted release of the Jeffrey Epstein files, for example.
Australia's prime minister has announced new measures to combat antisemitism. This comes after just days after a deadly shooting on
Hanukkah celebrations at Sydney's Bondi beach. And Anthony Albanese said the government would develop legislation to crack down on people who spread
what he calls hate division and radicalization. The prime minister also announced a taskforce to ensure Australia's education system prevents and
responds to antisemitism
(BEGIN VIDEO CLIP)
ANTHONY ALBANESE, AUSTRALIAN PRIME MINISTER: There is no place in Australia for antisemitism. It is an evil that tears at the fabric of our country. It
puts the peaceful, free and equal society that we cherish at risk.
(END VIDEO CLIP)
FOSTER: Meanwhile, a hotel employee has told CNN the suspected gunman remained in their hotel room for much of their visit to the Philippines
before the shooting. The staff member says Sajid and Naveed Akram would only leave the hotel for about an hour every day. Australian police are
trying to determine what role, if any, this trip had to play in the attack plans.
As the investigation continues, the site of the attack is being reopened, as Will Ripley reports.
(BEGIN VIDEOTAPE)
WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Just moments ago, police reopened the bridge that was the epicenter of the Bondi Beach
massacre because that's where the two gunmen, the father and son, were standing as they were firing rounds at the Hanukkah Festival, killing 15
people.
The oldest victim, an 87-year-old Holocaust survivor; the youngest, a 10- year-old girl named Matilda, who leaves behind heartbroken parents and a younger sister named Summer.
They may have chosen this spot because they actually have a lot of cover from the trees here. So it was really difficult for the police to fire
back. And they had these huge rifles that they kept reloading as they gunned down innocent people, simply for being Jewish.
It's really haunting to be standing here, frankly, because this is the bridge that we have -- we've seen from almost every angle. Everybody had
their phones out on the day of the massacre, filming.
And this is what the gunman would've been seeing as they carried out their brutal act. And then one of them, the father died here; the son was shot,
he was hospitalized, in a coma for several days. He's now been awake. He's been charged.
And this iconic Australian beach may never feel the same, certainly, for the people whose lives were changed forever on that awful day.
(END VIDEOTAPE)
FOSTER: Will Ripley.
Still to come, intelligence sources tell CNN that Russia's shadow fleet is doubling as a spy asset, a CNN exclusive investigation for you coming up.
(COMMERCIAL BREAK)
[15:22:05]
FOSTER: Turning now to an exclusive investigation. Western and Ukrainian intelligence sources tell CNN how Russia is using its shadow fleet of oil
tankers not only to evade sanctions, but as cover for espionage in European waters.
CNN's Katie Polglase has that story.
(BEGIN VIDEOTAPE)
KATIE POLGLASE, CNN INVESTIGATIVE RESEARCHER (voice-over): Looking out over the English Channel, this narrow stretch of water between the U.K. and
France, at points just 20 miles wide, is one of the busiest shipping lanes in the world.
POLGLASE: Now CNN can exclusively reveal that there have been ships, ordinary-looking cargo ships, that have sailed right past here with Russian
personnel on board, who, according to Western intelligence sources, are conducting espionage on behalf of the Russian state.
And that includes taking photos of European military installations, they say.
POLGLASE (voice-over): The men on board belong to the Moran Security Group, the sources said, a maritime private security company set up over a decade
ago to defend against piracy.
Last year, the U.S. sanctioned them for providing armed security services to Russian state-owned businesses.
These ships Moran Security are on are not usually Russian nor are the crew but they're known as Russia's shadow fleet, as Western authorities believe
they secretly serve the Kremlins interests, like carrying Russian oil despite Western sanctions.
We asked Ukrainian foreign intelligence, who have been tracking the group, why they think these men from Moran Security were on board.
OLEKSANDR STAKHNEVYCH, UKRAINE FOREIGN INTELLIGENCE: For our information, this actually, Moran Security Group, is connected to Russian special
service, GRU military intelligence. And it's coordinated by them.
POLGLASE (voice-over): He said the men are tasked with keeping an eye on non-Russian captains. But that is not the only role.
STAKHNEVYCH: They can be involved in like covert information gathering during the like, traveling during the routes of these vessels.
POLGLASE (voice-over): And a job application form on the Moran Security Group's website makes it clear what skills they're looking for, stating,
"Preference is given to former officers who have served in special forces units, including the GRU." That's Russia's military intelligence agency.
We tracked with shipping data and satellite imagery one of the ships Western intelligence sources told us Moran Security were recently on board.
This ship, the Boracay, is a crude oil tanker. It appears at the port of Primorsk in Russia on September 19th. We obtained the crew list, showing
the boat left Primorsk the next day. And after a long list of non-Russian sailors, at the bottom, are two Russians listed only as technicians.
But Western intelligence sources told us they are Russian contractors, acting in line with the Kremlin's interests and that one is a former member
of Wagner, Russia's most notorious mercenary group.
The cargo ship then sailed through the Baltic Sea and around the coast of Denmark.
[15:25:03]
Mysterious drones were seen over Danish military air bases and airports at the same time.
After the ship passed Denmark off the coast of France, it was detained by French authorities for not providing proof of the boat's nationality. Even
President Putin was following the news.
VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): They were apparently searching for some kind of cargo, maybe military equipment,
drones or something similar. There's nothing there and there never was.
POLGLASE: But actually the two Russian men from Moran Security were still on board, according to Western intelligence sources. And the French
authorities questioned them in private.
POLGLASE (voice-over): They were later let go and the ship sailed onto a port in India, where the ship unloaded Russian oil, according to a maritime
analytics firm. CNN was unable to contact the management of the ship.
We called Moran Security's deputy director, Alexey Badikov, about the findings. He said, "I am not in a position to confirm whether the two men
worked for the group," and said, "It was crazy to suggest the Boracay launched the drones," adding, "If you would like to use drones, you will
use fishing vessels or something like that, not from the big oil tanker."
When asked about the claim they are spying for the Russian security services or working for the Russian state, he said, "No comment."
Whatever Moran and Russia are doing at sea, their presence on board these boats is a sign of how brazen Russia has become in the face of their
European neighbors.
Katie Polglase, CNN, Dover.
(END VIDEOTAPE)
FOSTER: Coming up, searching for justice. I'll speak to the therapist. Some of the survivors of Jeffrey Epstein's abuse, just ahead of Friday's highly
anticipated file release.
(COMMERCIAL BREAK)
[15:30:03]
FOSTER: More photos from Jeffrey Epstein's estate have been released. This is as the Department of Justice faces a Friday deadline to release its
Epstein files. The latest batch of photos released by House Oversight Democrats have come to us here without any context at all. The images
include a text conversation discussing sending girls, Bill Gates posing with a woman, philosopher Noam Chomsky on a plane with Epstein, and
multiple passports.
The DOJ has given no details about the impending release of its Epstein files. That's separate, but survivors have advocated for the release of
those files for years now, in the hope that other perpetrators will be named and justice served.
What we want to know is how are Epstein survivors feeling on the eve of this huge deadline that they've been working for, for so long?
Joining me now is Randee Kogan. She has been a therapist to many survivors.
Thank you so much for joining us, Randee.
I mean, it's the eve of this huge event. What are people saying today?
RANDEE KOGAN, THERAPIST, JEFFREY EPSTEIN SURVIVORS: Well, there's a lot of concerns about if the files will actually be released tomorrow. So there's
a lot of, you know, holding their breath, hoping that tomorrow will be the day that finally, these records will be released. It's been almost two
decades already that they're waiting and they've been waiting for some people to be held accountable for everything that has gone on with Jeffrey
Epstein.
FOSTER: We've had these other images released from the estate. That's separate from the files that are coming out tomorrow. They're very abstract
because we don't get any context to them, do we? But we do see familiar faces in Epstein's orbit. We see very suggestive pieces of text and other
sort of messaging.
You know, it's interesting, isn't it? Because there's nothing firm there. It doesn't show a crime in any way, but it all seems to speak to your
client's stories and narrative.
KOGAN: Absolutely. And, you know, seeing all of these photos come out, it's quite triggering. There are so many photos of Jeffrey Epstein being shown
over and over and over again, and it's very hard. You know, everywhere they look, there are, you know, they see their abuser or they see other wealthy
men who are associating with Epstein.
And they just feel as though they've been fighting and fighting and fighting for justice, and they don't know who to trust. They don't know
who's listening. They don't know who's believing them. And this has been a theme for the past two decades.
FOSTER: Obviously, the women in these images have been kept anonymous because I don't think the people on the committee know how they might play
into this.
KOGAN: Yes.
FOSTER: When the files come out, your clients will appear in them, don't we -- won't they? Do you understand their names will be redacted? Are they
nervous about their names not being redacted? Or do they want to be seen as part of this story?
KOGAN: They want their names to be redacted to protect their privacy. However, they also want to know what? What does it say about them in the
files. They want to know pieces of their timeline that has been missing over the past 20 years. They want to see parts of their story in these
files, but they want to be able to see this with their privacy and protecting their name.
There's no reason why people need to know specifically, you know, which victim had what story. I don't think that's necessary. They don't feel
that's necessary, but they want answers -- answers that they have been waiting for, for so long for most of their adulthood.
FOSTER: But the more information that comes out, the easier they will be to be identified. Are they nervous about getting blowback for this because
it's such a divisive issue?
KOGAN: Yes. They're always nervous about blowback. You know, throughout the years, public comments have been very difficult for them to cope with. So,
yes, there's a grave concern about that. And they've been seeing blowback in the government with regard to the files. So, at this point, there's
nothing that surprising anymore.
FOSTER: If the files aren't all released, what's the game plan here? I know that many of your clients are working together, and they've been very
successful in getting to this point. But what -- what's going to be their reaction and how will they play it?
KOGAN: They're going to continue to fight and they're not going to give up until everything is released. And they get what they deserve. You know,
they -- so many of them never spoke before until the past year.
[15:35:01]
And they're at a point now where they're ready to fight for their -- their own justice. They're ready to fight to have people be held accountable.
Finally, for all of the abuse that all of these survivors have endured and being revictimized over and over again by the government, you know, saying
that justice will be served and then delaying justice.
So, this has been a back and forth, you know, game. And to them, it's not a game. This is their lives. They want to move on. They want to heal in
private. And they have not had the opportunity to do so as of yet
FOSTER: Randee Kogan, appreciate you joining us on the program. I know it's been a really traumatic day for a lot of people you work with, but thank
you.
KOGAN: Thank you.
FOSTER: It's the final moments of trade on Wall Street. Stocks are solidly higher. The Dow has been up for pretty much the entire session. This is our
business breakout.
The Bank of England voted to cut interest rates by a quarter of a point to 3.75. It now says inflation will fall towards its two percent target more
quickly. Meanwhile, the European central bank decides to keep rates on hold. It comes after the Fed decided to cut last week.
Most people know it is know as the place to read Donald Trump's social media posts. Now the parent company of Truth Social is merging with a
company that works with works on nuclear fusion energy, Trump Media and TAE Technologies will merge to make one of the first publicly traded fusion
companies. Shares in the president's company surged on news of that deal.
Some economic analysts are questioning this month's inflation numbers. The consumer price index fell to 2.7 percent from the previous 3 percent.
However, the government shutdown interrupted the data collection process, meaning that some numbers were just listed as zero. One economist tells
CNN, quote, that just doesn't pass the smell test.
Matt Egan has been breaking the numbers down.
And this really matters, doesn't it? Because it's so important that economists have faith in these numbers to trust them, to make judgments.
MATT EGAN, CNN SENIOR REPORTER: That's right, Max. I mean, look, the good news is that this report does show a major and surprising cooldown in the
rate of inflation in the United States. The bad news is that virtually none of the economists that I've talked to believe that it's real. They do think
that the government shutdown really distorted these numbers, and I'll get into that.
But first, just to remind you of what we're talking about here. So, consumer prices up by 2.7 percent year over year in November. Now that is a
four-month low. It really beats the expectations, which was that inflation was going to stay at 3 percent.
And when you look at the trend here, you can see that last year inflation was coming down. And then in April the president rolled out those
historically high liberation day tariffs. And you did start to see the rate of inflation move back up, in part because of those historically high
tariffs.
Now the latest reading shows that the rate of inflation has come down. However, as I mentioned, there's a lot of skepticism out there. I think
Wells Fargo put it best. They said, you don't just need to take this with a grain of salt. They said, you need to take it with the entire salt shaker.
And really, there's a few things, right? First off, some of the shelter rent readings here, they showed almost no change at all between October and
November. Some economists are saying that really does not pass the smell test. The other thing is that we don't have any numbers for October,
because the surveys that would normally be done by government workers at the Bureau of Labor Statistics, they couldn't do it because the government
was shut down.
And the other problem is that some of the surveys that were done during the month of November, once the government shutdown ended, they took place
later than usual and actually a lot closer to all those deep discounts during the holiday shopping season.
But I do want to just emphasize that even if you believe the rate of inflation came down, that does not mean that prices are down. It just means
they went up at a slower pace. Now breaking down some of the specific categories, some encouraging findings. Gasoline only up by less than 1
percent year over year in November. And we know gas prices went even lower this month.
Grocery prices up by less than 2 percent. That's below the overall rate of inflation. So that's encouraging. However, some other things got a lot more
expensive. Look at electricity up by almost 7 percent year over year. That's going to cause some sticker shock when people open their utility
bills.
Natural gas, the leading way to heat homes in the United States up by more than 9 percent.
And then bad news for coffee lovers, roasted coffee 18 percent more expensive year over year. Instant coffee, 24 percent more expensive. That's
the biggest annual gain since 1995 for instant coffee. And that also reflects the very high tariffs on imports, including imports from Brazil,
the leading source of coffee into the U.S.
Now, some of those tariffs have been rolled back, but still the prices were still going up in November.
[15:40:05]
Now, one last point for you is what does all this mean for the Federal Reserve? I think what's telling is that a day ago, the market thought there
was a 24 percent chance of an interest rate cut in January, and at last check, the market still thinks it's a 24 percent chance of a cut at the
next meeting in January. And I do think that that underscores this skepticism about how much we should really believe this latest inflation
report, which does look like it was distorted by the government shutdown.
So, Max, we do have to wait for the next report to really get some confirmation and clarity on where things actually stand with the cost of
living.
Back to you.
FOSTER: That would be helpful. Matt, thank you so much.
Still to come. Donald Trump and marijuana. We'll tell you about the impact of an executive order signed by the president just about an hour ago.
(COMMERCIAL BREAK)
FOSTER: With the stroke of a pen, Donald Trump has changed decades of government policy on marijuana. About an hour ago, Mr. Trump signed an
executive order changing marijuana from a schedule one drug to a schedule three that loosens the federal restrictions on it. And the move is likely
to spark more research into the medical benefits of cannabis and could make it easier for states to make it legal.
Trump spoke about how cannabis can help cancer patients, and said the American people wanted him to take this step.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I can tell you, I think I probably have received more phone calls on this, on doing what we're doing.
I don't think I received any calls on the other side of it, but hopefully this reclassification, which, by the way, polls at 82 percent will help
many of those patients live a far better life.
(END VIDEO CLIP)
FOSTER: What we want to know is, will this executive order change how Americans use marijuana?
Joining me now is Jeremy Berke. He's the founder and editor in chief of "Cultivated", a daily briefing on cannabis business.
Thank you for joining us, just about.
JEREMY BERKE, FOUNDER AND EDITOR-IN-CHIEF, CULTIVATED NEWS: Thank you for having me. Apologies. The phone fell.
FOSTER: Just first of all, just explain what a big turnaround this is.
BERKE: Yeah, sure. So, this is really the biggest shift in cannabis policy and possibly drug policy writ large since the Nixon administration, since
President Richard Nixon first scheduled cannabis. The move is full stop, far from legalization. However, it does change cannabis from the most
restrictive schedule one to the far less restrictive schedule three, which, as the clip showed earlier, Trump hopes will unlock research into the
medical and therapeutic benefits of cannabis.
FOSTER: Does it just apply to the medical side, or will this affect the recreational side as well?
BERKE: So, it -- Trump's specific executive order is targeted towards the medical side. However, there are pretty profound effects for the
recreational or consumer side of the cannabis industry as well. These effects are less for consumers themselves, but rather the companies that
cultivate and sell cannabis in states where its legal. Schedule one -- companies that sell schedule one drugs are subject to an IRS rule that
forces them to pay upwards of 70 percent on their tax rate, while schedule three drugs, that tax goes away.
So that's a lot of investment dollars unlocked for these companies. And it should go a long way as well towards normalizing the cannabis industry's
relationship to the financial system.
FOSTER: So, I mean, there's -- it's not a necessarily controversial, is it? The idea of using cannabis based medicines because it's been proved to be
effective and therapeutic. I'm just wondering if the side effect here might be more recreational use. I'm not sure where Donald Trump stands on this,
but he's certainly against any sort of addictive substance. I mean, he's described some drugs as weapons of mass destruction.
BERKE: Yes, yes, President Trump is absolutely against the use of most drugs and intoxicating substances. I mean, he is an octogenarian,
teetotaling president, Republican president, right? And so, the way he's politicized, what he's doing here is to target towards research. You know,
you heard him talk in the Oval Office about hearing from his friends on the golf course, et cetera, that they use cannabis products that CBD helps.
But schedule three really doesn't change the legal status of recreational cannabis use at all. States that have legal cannabis programs, like New
York, where I am, or California, they are still in violation of federal law, regardless of the actual federal classification or federal schedule of
the drug. And so, Trump was pretty clear that he is not endorsing the recreational use of cannabis, that this move isn't targeted towards the
recreational use of cannabis.
However, all that being said, this is the U.S. federal government rolling back restrictions on cannabis. And so, there is that sort of tacit
acknowledgment that, hey, look, millions of people are using this every single day. Federal law is out of step with state law. And maybe some
change is necessary.
FOSTER: It's also saying its safe, isn't it, as a government sort of seal of approval, that it's not that dangerous. You know, where do you stand on
that? I mean, is it a completely safe thing to use
BERKE: Yeah. Look, I mean, you know, I think you can ask ten different people and get ten different opinions about whether it's safe. I will say
two things. Number one, cannabis is quite under-researched thanks to it being a schedule one drug.
So there's a lot of unknowns here, right? Number two is that, you know, everyone I think anecdotally knows that, you know, if you drink too much,
you can get into a car accident or get aggressive. That certainly does not happen if you consume too many cannabis products. But part of the goal with
this is to really understand better produce clinical trials, to see the medical applications and understand better what happens when we legalize
cannabis. You know, what are some unpredictable outcomes of this?
That being said, you know, I want to underscore the fact that, you know, almost half of U.S. states have now legalized cannabis. Canada, our
neighbor to the north, has legalized cannabis federally. And we certainly have not seen the sky fall in on any of those jurisdictions or countries.
However, you know, this is still a living, breathing policy debate. And this is a massive shift. So, it'll be very interesting to see what happens
next.
FOSTER: It's going to keep you busy. Jeremy, appreciate it. Thanks for joining us.
BERKE: Absolutely. Thank you so much. I appreciate it.
FOSTER: Still to come, a royal pint. King Charles pours the perfect pint, would you believe? Of Guinness as well as he helps open a new brewery in
London.
(COMMERCIAL BREAK)
[15:52:21]
(BEGIN VIDEO CLIP)
PETER ARNETT, PULITZER PRIZE-WINNING CORRESPONDENT: The roof of this building is 15 feet deep of concrete reinforced with steel bars. The bomb
cut through it like butter.
(END VIDEO CLIP)
FOSTER: Peter Arnett, he spent decades reporting from dangerous combat zones, has died. He won the Pulitzer Prize in 1966 for his Vietnam War
coverage for "The Associated Press". He also worked here at CNN covering the First Gulf War, most notably with his iconic live reports from Baghdad
at the start of the Operation Desert storm. Arnett entered hospice last weekend whilst battling prostate cancer. His son says he died Wednesday in
Newport Beach, surrounded by family and friends. Peter Arnett was 91 years old.
Soviet era reel to reel tape decks and recorders are finding a new life at a small museum in Kazakhstan, which has been preserving and collecting the
machines and tapes for more than two decades. The owner says the bootleg tapes were the only way to access western music in a time when it was
prohibited behind the Iron Curtain.
CNN's Polo Sandoval reports.
(BEGIN VIDEOTAPE)
POLO SANDOVAL, CNN CORRESPONDENT (voice-over): Before the Soviet-era collapsed in the early '90s, most western music was banned. Some people
still found a way to listen to popular artists like Bob Marley or the Beatles on bootleg reel-to-reel tapes.
ANDREI KLIMENKO, COLLECTOR AND FOUNDER OF MUSEUM (through translator): We listened to what was prohibited to listen to, foreign, European, American,
English, altogether western music.
SANDOVAL (voice-over): Andrei Klimenko has been collecting these Soviet-era tape recorders for two decades. And we're in the small museum in Almaty,
Kazakhstan is playing more than 200 of them. He says, even though he can now legally listen to any music he likes, he still collects bootlegs.
KLIMENKO (through translator): I wanted to hear the sound I used to listen to when I was young.
SANDOVAL (voice-over): During Soviet times, black market sellers in the USSR offered western music. People would buy a record, then use a reel-to-
reel to make a copy to share among their friends.
KLIMENKO (through translator): So, we used to chip in on a record, copy it somewhere, and shared this copy between ourselves. This is how we used to
listen to music.
SANDOVAL (voice-over): The museum owner says, people of all ages enjoy visiting and hearing the tapes, even if they were born in post-Soviet
times. But those who were there for the Iron Curtain of music, especially appreciate it.
EVGENY, MUSEUM VISITOR (through translator): This equipment has been close to my heart since I was a child. This museum even displays my first reel-
to-reel tape recorder.
SANDOVAL (voice-over): Polo Sandoval, CNN.
(END VIDEOTAPE)
FOSTER: Finally, tonight, a Christmas pint for King Charles. The king paid a visit to the new Guinness brewery in London today, where he got a lesson
on how to pour the perfect pint, a task he aced with flying colors, before having a sip of the famous Irish stout.
(BEGIN VIDEO CLIP)
PRINCE CHARLES, GREAT BRITAIN: It is great stuff.
UNIDENTIFIED MALE: Certainly my typical choice.
PRINCE CHARELS: Is it?
UNIDENTIFIED MALE: Yeah.
PRINCE CHARLES: It gets stuck in your beard.
UNIDENTIFIED MALE: Sometimes, sometimes. I'd be careful with the mustache in particular.
(END VIDEO CLIP)
FOSTER: And a merry Christmas also from the prince and princess of Wales. Kensington Palace releasing this springtime image of the royal couple and
their children. Princess Charlotte, Prince George and Prince Louis, alongside the photo, the royals wished everyone a very happy Christmas.
I'm Max Foster. That's WHAT WE KNOW.
Stay with CNN.
END
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