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Markets Dive Amid Recession Fears; Kamala Harris to Choose V.P. for Ticket; Soon, Biden Meets National Security Team in Situation Room as Tensions Escalate Between Israel and Iran. Aired 1-1:30p ET

Aired August 05, 2024 - 13:00   ET

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

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BRIANNA KEILAR, CNN ANCHOR: Taking stocks maybe today is the day you do not log in to your 401(k) as global markets take a nosedive amid fears that soft landing. The Fed was aiming for could turn into a crash landing. What's causing the panic on Wall Street and how will it impact the election.

And Vice President Harris facing one of the biggest decisions of her presidential campaign, who she'll pick to be her running mate. The decision could come at any second.

OMAR JIMENEZ, CNN ANCHOR: And Debby, that is Hurricane Debby, hits the Florida coast as a Category 1 hurricane. But the storm's worst may be yet to come as some places get a month's worth of rain in a single day. We're following these major developing stories and more all coming in right here to CNN News Central.

KEILAR: Hello. I'm Brianna Keilar alongside Omar Jimenez today, great to have you in.

JIMENEZ: Good to see you.

KEILAR: And we begin with just an economic earthquake and aftershocks that could transform the race for the White House after a selloff overseas markets here in the U.S. plunged at the bell. And it is ugly.

Here are the numbers right now. The Dow, the NASDAQ, the S&P all plunged before leveling off. And this is leading to fears that the U.S. is inching closer to a recession.

JIMENEZ: And the election, by the way, is just 92 days away, but who's counting, of course?

KEILAR: Who's counting?

JIMENEZ: This just adds into all of the implications that we've been following. This could obviously have a big impact here.

CNN's Julia Chatterly is in New York for us. So, Julia, what's your analysis of what we're seeing this afternoon? JULIA CHATTERLY, CNN BUSINESS ANCHOR AND CORRESPONDENT: Okay. So, I think it's an ugly day. You're using the right word. There's a palpable fear globally. As important as the U.S. economy is and the data, the jobs data that we got on Friday, it's also important for our viewers to understand that this is not the only thing going on.

We've seen for now a number of days, tech stocks, which have been the big strength in this market, coming down. Those stock prices have been coming down. So, that's been wobbling. Then you can add in the fact that this is summer time. There's a lot of investors that aren't there. So, it makes people concerned and it makes markets more choppy.

Then what we saw overnight, the Japanese stock market fell 12 percent. You don't see a big market in the world falling 12 percent without seeing some kind of payback in U.S. stocks. So, we're seeing that, too.

I think the important thing to note today is we're off the lows, which is a good sign. And the silver lining for borrowers out there across America that are watching this is the conversation has changed on the U.S. economy. We're no longer asking if the Federal Reserve will cut rates in September. It's by how much. And we're already seeing mortgage rates coming down as well.

So, some of this concern is having positive effects, but I do understand the fear, but I think we have to keep calm and just watch this. This is not panic. This is fear.

KEILAR: It is fear. It's a very emotional response. And, of course, Americans are going to be looking at that, Julia. Should they be worried about a recession as the markets are telegraphing that?

CHATTERLY: No one's talking about imminent recession, Brianna. We're talking about rising recession risks. And we had one of the Fed board members speaking earlier today, and he said, look, if growth weakens further from here, if we see further issues with inflation, if we see further market instability, and, by the way, this isn't that the Fed will fix it.

So, I think it's right to be asking questions about whether they could have cut rates and why they didn't cut rates. But remember, this economy is still adding jobs overall. It's weakening, but we're not at the point where we should be talking about recession.

So, again, it's a concern, but I do think people need to keep calm. And, you know, Julia, you touched on it a little bit, but obviously there was a lot of concern and what ended up being, I think, maybe rightful criticism, in some respects, about the Fed not cutting interest rates last month, or I guess last week when they had the opportunity.

They meet again in September, but is there any possibility of an emergency rate cut before then?

CHATTERLY: So, they could cut rates before that meeting. I don't think they will. I think that would actually add to some of the fears that we're seeing with people going, what do they know that we don't? Remember, they have a lot of tools that they can use at this point if they want to stabilize the market.

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But unless we send something significantly worse than this or worse data points, let's be clear, I don't think they'll do anything and I think the wait till September.

KEILAR: and then former President Trump because, of course, this is, you know, the biggest issue when it comes to the election, he's labeling this the Kamala crash, and he's warning of the Great Depression of 2024. Your analysis?

CHATTERLY: I'm trying to refrain from eye-rolling. I think it's uncanny that when the stock market's at record highs, he takes credit, and then when they're falling, he blames someone else. I think we've seen that before.

Look, this is not a crash. No one's talking about imminent recession at this stage, and they're certainly not talking about Great Depression. Quite frankly, that idiocy and I think that's fear mongering and we should avoid it.

However, what we are seeing is important for the White House. We know that this White House has been given relatively little, if any, credit when the economy was solid. And now it's slowing. So, all the questions about the concerns about inflation, about people worrying about paying their bills, they're only going to get more fierce as the economy slows.

KEILAR: Yes, huge issue. Julia, thank you so much for that and taking us through it. We do appreciate it.

We are at a potentially pivotal moment in the 2024 presidential race, because any moment now, Vice President Harris could be picking her running mate. This is a whirlwind search and it is now in its final hours with Harris meeting at least three of the final contenders yesterday.

JIMENEZ: And those interviews involve Pennsylvania Governor Josh Shapiro, Arizona Senator Mark Kelly and Minnesota Governor Tim Walz. Tomorrow, Harris and her V.P. pick are set to launch a week-long campaign tour across seven key battleground states, starting in Pennsylvania. But you got to name your V.P. pick before then. So, we'll see.

CNN's M.J. Lee is in Philadelphia, where Harris will introduce her new running mate. So, M.J., where do things stand right now?

M.J. LEE, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, we are standing by here in Philadelphia, where tomorrow night, as you said, the vice president and her future running mate will hold their first political rally together as a joint ticket of the 2024 cycle. Sometime before then, of course, the Harris campaign will have to unveil that decision, arguably the most important political decision that the vice president has had to make so far.

I am told that even as of this morning, the vice president had not yet made that decision. It is expected to come sometime later today, at which point she would, of course, inform a small team of advisers and, of course, make that phone call to her chosen running mate. But we are being cautioned that this is a fluid situation and this is ultimately her decision and hers to make alone and that that decision timeline could ultimately slip to tomorrow.

Now, yesterday, as you said, the vice president was in Washington, D.C. and met in person with at least three of the finalists, Pennsylvania Governor Josh Shapiro, Minnesota Governor Tim Walz, and Arizona Senator Mark Kelly.

Based on all of our reporting, it would be very shocking if that ultimate choice did not end up being one of those three. And we know that the two biggest questions that the vice president has been making throughout this process have been who can actually help her win and who can be a helpful governing partner for her.

Now, after tomorrow night, that rally in Philadelphia here, the two are going to hit the ground running, traveling to some seven cities and five different battleground states. When we are actually going to find out, this decision is really anybody's guess, but we do know that the campaign is obviously trying to keep this decision when it comes tightly under wraps.

The hope is that they're going to be able to keep this from getting out into the public until that Philadelphia rally, and the model would likely be what we saw some four years ago when President Biden revealed that he was choosing Kamala Harris as his vice presidential running choice with an online message.

So, that is the model that we expect to see again sometime in the next 24 hours or so. Of course, this has been a sprint of a transformation for Vice President Harris over the last 15 days, and she is trying to keep that momentum up with this expected decision and news.

JIMENEZ: Standing by to stand by, but it sounds like we'll have an answer pretty soon here.

M.J. Lee, I really appreciate it.

Let's talk more about this big decision with David Urban. He's a former Trump campaign advisor and a CNN senior political commentator. We're also joined by CNN Political Commentator Bakari Sellers. He's a former Democratic state representative in South Carolina.

Bakari, I want to start with you because, I do think it's easy, maybe traditionally, to think the vice presidential pick doesn't matter as much. But why is this so different? Why is it so important that she gets it right here? Set the stage.

BAKARI SELLERS, CNN POLITICAL COMMENTATOR: Well, it's the first true big moment of decision that she has in the race. And I do think, though, and I think David actually speaks to this a lot, can speak to this a lot better than I can, there probably is one candidate in Josh Shapiro who may help marginally in Pennsylvania.

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And this is going to be a marginal race.

And the other thing that matters, and I think, you know, the four of us know it, but it's important for our viewers to know it, there's really no path that you can draw up for Kamala Harris to be president of the United States that does not include Pennsylvania in our column in the Electoral College. And so that's important to note.

And we know we can go through the theories of the political science around how vice presidents are selected. Some people are selected a lot like J.D. Vance was selected for Donald Trump, or even probably more pronounced Al Gore selected by Bill Clinton to double down on your messaging. And others are selected to balance out a ticket. In this case, Kamala Harris is looking to balance out a ticket, but she has that unique ability because of that experience to choose based upon, you know, her service as vice president for Joe Biden.

KEILAR: David, is there a candidate in these top three that the Trump campaign would prefer?

DAVID URBAN, CNN SENIOR POLITICAL COMMENTATOR: Well, listen, I'm not going to, you know, presume to speak for the campaign. Let me speak for David Urban. I think Josh Shapiro is the best political athlete of the three. As Bakari points out, you know, vice presidents don't really ever make a huge difference, but they do give you a half a percent bounce generally, maybe 1 percent bounce. And that may be all that's needed in Pennsylvania to put her over the top, if she does pick Josh Shapiro.

Look, Mark Kelly, war hero, a decorated combat veteran you know, Navy carrier pilot, astronaut, Walz speaks to the progressive base. I mean, I can make the case for and against all three of these gentlemen to be on the ticket. But, you know, Brianna, I am hoping that we get past this pick and we can start talking about the things that matter to Americans, like inflation and crime.

I just noted what a good friend of mine sent me a thing this morning about -- it is kind of interesting, the Denny's Grand Slam breakfast. In 1977, the Denny's introduced the Grand Slam breakfast in honor of Hank Aaron. It was $1.99 in 43 years, it went up $4 in price. And in the four years of the Biden-Harris administration, it's gone up $7, $5.99 to $12.99. Those are the things that matter to Pennsylvanians. You go to soccer with your kids. You can't go to Denny's afterwards because it cost $50 now as opposed to $10.

Inflation is going to be foremost of people's mind, the border. So, I want to get past this irrational exuberance, as our friend David Axelrod says, and let's start talking about the issues that matter to Pennsylvanians and let's hear from the campaigns about what they're going to do to make people's lives better. I want to hear a debate on the merits.

KEILAR: Bakari, what do you say to that? SELLERS: Well, I say, in 1977, my parents were actually sculpting out and thinking about me. I was about seven years away from actually being born. And so I was probably on their radar screen as the amazing child they have. But David's right. I mean, inflation is something, cost is so important to individuals. My father had the same concern about the price of whiting at the Piggly Wiggly down the street from our house. And so that is a true concern.

But the fact is Kamala Harris has built this momentum. She's built this energy, this exuberance. I disagree with David Axelrod. It's not irrational. It's something that she cultivated. It's here as present. And a lot of that has to do with this simple fact, and I think that David would probably agree with me. This week, we just owned the news because of the simple fact that she's going to announce the vice president. And then she's going to hit seven different swing states.

On the schedule this week for Donald Trump, today, he is with streamer sensation Aiden Ross down at Mar-a-Lago. And then he has one event in the swing state of Montana. I'm saying that facetiously. And so while Kamala Harris is hitting every single swing state, talking to voters, meeting the voters where they are, Donald Trump, I'm afraid of showing the fact that he's 78 years old and may not be up to the task of --

KEILAR: But I see your point.

URBAN: Yes. So, Brianna, I agree, listen, Bakari's right. If Republicans don't start talking about the issues that matter to people, right, if we don't talk about what we're going to do, if Donald Trump doesn't say, this is what I'm going to do to make your lives better, how I'm going to reduce your taxes, how I'm going to reduce inflation, your lives are going to be better, we don't talk about the issues, we will lose. We need to start talking about the issues that matter to people in their homes. Not about grievances, not about who you're mad at or who you like or you don't like, how are we going to make people's lives better? If we don't do it, Bakari's going to be a really happy guy on November 5th.

KEILAR: Bakari, David Urban, both happy guys today.

JIMENEZ: Yes, and they seem great to me.

KEILAR: But look, it's going to be an interesting week, so we'll keep talking you guys. Thank you so much for being with us.

And soon, President Biden is going to hold a meeting in the Situation Room is fears of a larger war in the Middle East are escalating.

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Ahead, we'll show you how U.S. military leaders are preparing.

Plus, Tropical Storm Debby makes landfall and slows down over Florida and Georgia, millions of people now dealing with more than a month's worth of rain that has fallen in just a matter of hours.

JIMENEZ: And a decade-old mystery has been solved. We now know who left a dead bear cub in New York's Central Park. We're going to have the bizarre confession just ahead, and it is bizarre.

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JIMENEZ: All right. A little under an hour from now, a major meeting is expected in the White House Situation Room. President Biden and Vice President Harris are gathering with their national security team as tensions escalate in the Middle East.

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Now, Iran says it is determined to punish Israel over last week's assassination of a Hamas political leader in Tehran. Now, leaders in the region are scrambling to deescalate the situation, as Axios now reports that Secretary of State Antony Blinken warned G7 allies that an Iranian strike could happen as soon as today.

CNN's Kayla Tausche is at the White House for us. So, Kayla, what more are you learning about today's, what I would call, high-stakes meeting in this Situation Room?

KAYLA TAUSCHE, CNN SENIOR WHITE HOUSE CORRESPONDENT: It absolutely is, Omar. President Biden is on his way back to the White House, where the Biden administration writ large is bracing for the potential for retaliatory strikes on Israel after those attacks last week shook the already fragile status quo in the region.

Now, that high-stakes national security meeting will take place in the Situation Room in just about an hour's time, but it's a departure from the norm that the White House chose to disclose it so far in advance. That puts the world on high alert, that the West is very closely monitoring the situation and preparing its potential response. It also serves to telegraph publicly the role of Vice President Kamala Harris at President Biden's right hand in discussing these very developments and crafting the U.S.'s response.

Now, just a few months ago, when the U.S. was evaluating the retaliatory strikes by Iran on Israel back then, the White House disclosed that Situation Room meeting nearly concurrently as it was happening, as well as the participants in this meeting, which just goes to show you how much of a departure it is for the White House to have laid this out. But it also comes as, at least one source believes, that those strikes from Iran could come as soon as today or tomorrow, and there was a very real near term risk of an intensifying violence in the region.

And it also comes after a President Biden and his top deputies have had a series of very tense calls in recent days. Yesterday, President Biden spoke with Israel's Prime Minister Benjamin Netanyahu, and a source described that call as incredibly fraught, as the two leaders discussed the potentially dimmer prospect for a ceasefire deal between Israel and Hamas.

And then today, President Biden spoke with King Abdullah of Jordan, where they discussed the need to de-escalate tensions, Omar, but, certainly, the situation has only intensified in recent days, as the U.S. and the west at large are on high alert. JIMENEZ: And as you laid out, incredibly wider implications here for not just what comes out of this meeting, but what may happen in the days to come. Kayla Tausche, I really appreciate it. Brianna?

KEILAR: All right, let's take a deeper look at this. We're here with retired Air Force Colonel Cedric Leighton. He's our CNN military analyst. Thank you so much for this. And we should note, obviously, the U.S. very involved here, they have been in the past, when Iran has responded. So, what are the assets that the U.S. already has in the region and how are they preparing?

COL. CEDRIC LEIGHTON (RET.), CNN MILITARY ANALYST: Yes, Brianna, there is a lot going on in this department. First of all, the USS Abraham Lincoln, this aircraft carrier, and the Associated Carrier Battle Group, are steaming into the Persian Gulf and -- excuse me into the Mediterranean and other assets are in the Persian Gulf as well as other places. You've got the USS Wasp. You also have destroyers and cruisers, about 11 of them, that are capable of ballistic missile defense and also offensive missile capabilities, plus a squadron of F- 22.

So, what they're going to do is they're going to be parking themselves in places like this, off the Israeli and Lebanese coasts, potentially in the Red Sea, because of Yemen and the Houthis down there, and, of course, here in the Persian Gulf. And that, of course, impacts Iran.

Plus, there are other assets, right, that we could look at, for example, in Qatar, where potentially the extra squadron of F-22s would be based, or the UAE where something similar could happen there. So, all of these assets are designed to contain anything that Iran would potentially throw at Israel or U.S. assets.

KEILAR: Yes. And then back, of course, in mid-April, Iran launched an attack on Israel, which was in retaliation for Israel strike on that was really like a consular annex in Damascus. It killed two Iranian Revolutionary Guard commanders. Israel never claimed the attack. We should mention that. That's not unusual. But when Iran responded, it fired about 300 projectiles.

What does that instance tell you about what we may be looking at here?

LEIGHTON: So, this was kind of, I think, a dry run for the Iranians. What happened in April of those 300 projectiles that they threw, included missiles, rockets, drones. And a lot of those capabilities were designed to be used in tandem.

Now, the Iranians didn't quite synchronize everything that they needed to synchronize. So, when you look back at the map again, you can see that they were targeting areas all throughout Israel. They hit one airbase right about there. But the basic idea was that this would allow the Iranians to blanket Israel.

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They were not successful at all in doing that. One person was injured, very little damage, except to that airbase. And that was, in essence, what Iran could do with that amount of firepower. If they try to do this again, the Israelis are going to be prepared for it, but the Iranians will probably try to synchronize things a little bit better this time around.

KEILAR: Interesting, a dry run there. Over the weekend, if you were listening to Benjamin Netanyahu, he raised this possibility again of a multi front war. How dangerous would that be?

LEIGHTON: That would be incredibly dangerous. So, let's take a look a little bit here. For example, this is the Golan Heights, and this is where that attack occurred that killed those children, those Druze children, that started a lot of what we're seeing now. So, this is the northern border. Right here, you have a lot of Hezbollah forces here.

Now, in Gaza, this, right off the coast here, I just put the note here, because this is, of course, where Hamas is active, plus you have elements that could potentially be active from the West Bank, and anything else that you see here could potentially be impacted in Israel itself. So, they could get attacks from this area, from here, West Bank, and then, of course, all the way from Western Iraq, and even into, from Iran and Syria that could potentially blanket all of Israel in this case.

KEILAR: We have a really interesting graphic here to look at, because what you see is, as you look at Gaza, you see where Hamas has reconstituted in place where the IDF had initially cleared them from.

The U.S. military is certainly familiar with this idea of clearing something that they ultimately cannot hold. But what does this tell you about whether Israel is really capable of degrading these groups?

LEIGHTON: The simple answer to that, Brianna, is they are not capable of degrading these groups using the tactics --

KEILAR: Permanently.

LEIGHTON: That's right. Permanently, that's not going to go away. Almost any military tactic that you would use against a group like Hamas, especially as it's constituted here, shows that this is more than just a military unit. This is a terrorist unit that is embedded within the society. Of the 16 that the American Enterprise Institute and the Institute for the Study of War analyzed, you had basically about two that were destroyed, just two, degraded, nine of them that you see here, mainly in the north and a little bit in the center.

But then you look at this, five or combat effective. The fact that these units are combat effective now means that they can do stuff against the Israelis, whether in Gaza or even outside of Gaza. And seven of these units, maybe not as effective as the others, are totally reconstituted now.

So, this means that Hamas, is able to re-grow itself, it can do things that you would not expect it to do. If you bring a whole bunch of forces to bear on a particular place like that, what it proves is that those forces are not as effective as the ideology.

KEILAR: Yes, very interesting, fascinating look there. Colonel, thank you. We do appreciate it.

And still ahead, emergency officials warning of a life-threatening situation that's developing in portions of Florida and Georgia. Tropical Storm Debby is bringing historic flooding to the area. We're going to be taking you there live next.

And we are continuing to watch the market after a nosedive this morning. Why fears are surging on Wall Street today.

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