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Trump Prepares to Reclaim The White House; Trump Could Announce Key Staff Picks Within Days; Trump Makes Big Gains Among Latino Men. Aired 2-2:30p ET

Aired November 07, 2024 - 14:00   ET

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

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[14:01:12]

BRIANNA KEILAR, CNN HOST: A key decision from the Federal Reserve, what a rate cut could mean for your wallet. And President Elect Trump's policy plans, what they mean for the central bank's future plans.

Plus, Democrat blame game. President Biden addressing the nation following Donald Trump's election victory. What Biden is saying as Democrats search for answers after their resounding loss.

BORIS SANCHEZ, CNN HOST: And transitioning to Trump, the President elect preparing for his move back into the White House. We have new reporting on who may be going with him and what they're planning for day one.

These major developing stories and many more coming your way right now on CNN News Central.

KEILAR: We do begin this hour with breaking news. The Fed just making its latest decision on rate cuts.

SANCHEZ: Now, let's get straight to CNN business anchor and correspondent Julia Chatterley. Julia, break it down for us. What's the decision?

JULIA CHATTERLEY, CNN ACHOR AND CORRESPONDENT: There's good news for borrowers. The Federal Reserve delivering a quarter of a percentage point rate cut. It was a unanimous decision and of course, it adds to the half a percentage point rate cut that they did back in September.

In many respects, that's the easy part of today. The harder part comes next, and that's the press conference that we've got in around 30 minutes time. And it's a case of the do's and the don'ts for Jay Powell and the Federal Reserve. What they do want to be talking about today is the fact that they've managed to engineer what we call a soft landing. They've hiked rates, they've avoided recession, at least for now, and they're very close to their inflation target.

What they don't want to be talking about, quite frankly is, is Donald Trump. Good luck with that. So where that leaves us basically is a situation where we know what's clear now is that while they can cut rates today, the future path of interest rates now is more uncertain. And what that depends on is the policy decisions of the president elect, his government, of course, and who wins the House. Very important point to that, too.

At worst, let's take the worst case, if he enacts mass immigration limits, mass global tariffs, it could slow growth, it could also raise inflation. Economists generally agree we could see 1 percentage point rise in inflation next year. That's going to slow the Federal Reserve down in their ability to cut rates. But of course, all we're doing is guessing at this stage. And that's the challenge for Jay Powell today. But I will say, we are already seeing an impact for consumers, guys.

I'm really closely following longer term government borrowing costs because these are very much tied to what we're seeing for mortgage rates in the United States. If you take a look at the 30-year mortgage rate chart, we're seeing mortgage rates rise right now. Now, some part of this is normal. When the Federal Reserve cuts rates, you see these borrowing costs rise, but it can also be tied to the prospect of more spending. It can also be tied to the prospect of more inflation. So that's something I think that Jay Powell will also address today, even as he does his best to avoid talking politics, avoid talking about Donald Trump, and avoid talking about the things that he doesn't know yet. We have to wait to see what the government do.

SANCHEZ: Julia Chatterley, thank you so much for the update. Let's discuss now with a pair of analysts. We have Mark Zandi, a Chief Economist for Moody's, and Doug Holtz-Eakin, former Chief Economist on the White House Council of Economic Advisers under President George W. Bush. He's now the president of the American Action Forum. Thank you both for being with us.

Mark, first to you, your reaction to this rate cut. How exactly is this going to impact America?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S: Well, much anticipated, Boris. The Federal Reserve has achieved its goals of full employment. The unemployment rates around 4%. It's low for all demographic groups and across the country. So check, they've achieved that goal.

[14:05:01]

And they now have achieved the goal of getting inflation back down to their target, which is a 2% inflation rate, and they've done that. So they're now lowering interest rates to something that's more consistent with rates neither supporting or restraining economic growth, the so called equilibrium rate. And they're on their way. They're not -- they've got a ways to go, but they're well on their way, and that's all good news.

And that's good news for American households and consumers, particularly folks that took on credit card debt or consumer finance loans or home equity lines credit back when inflation was high to supplement their income to maintain their purchasing power. So this is good news. It should be, you know, helpful. It's going to take some time before this all translates through into lower credit card interest rates and consumer finance rates. But I think that will occur over the next few weeks, few months.

KEILAR: And Doug, what do you think?

DOUG HOLTZ-EAKIN, CHIEF ECONOMIST WH COUNCIL OF ECONOMIC ADVISERS UNDER PRESIDENT BUSH: Oh, I think Mark characterized it exactly correctly. You know, the Fed is moving towards something that's more neutral. It's been leaning against growth in the economy, trying to slow the pace at which we get inflation. It's been largely successful in doing that. And so it is now moving back toward neutral.

Given what we know, I think that it's exactly in the right place. The main part of the economic landscape, however, are the unknowns, what will the incoming Trump administration do with tariffs, with taxes, with spending, and, you know, what will happen in the global economy? So they're constantly rebalancing as they find out more about the conditions in which they're operating.

SANCHEZ: To that point, Doug, we have heard from mainstream economists this concern over the potential for tariffs installed by the Trump administration to be inflationary. And yet, the stock market seemed to react positively to Trump's election. What's going on there?

HOLTZ-EAKIN: Well, I try hard not to try to explain the stock market. The stock market has two components. One, the earnings of those firms that are listed on the stock market. And if their future earnings look better, stocks go up. And two, the path of interest rates and other competitive vehicles for your savings. You can put in the stock market, you put in the bond market. So as people make different judgments about future interest rates and future earnings, you see the stock market move around.

It can move a lot in a single day. And then they can reconsider it. It might pull back some. So it's best to look at the stock market over a sustained period. I think if we get to June of 2025 and you still see it rising at those kinds of rates, that would be an enormous success. But I don't expect anything that large.

KEILAR: And Mark, Trump --

ZANDI: Hey, Boris, can I take a crack at that question?

KEILAR: Yeah.

ZANDI: Is that okay?

SANCHEZ: Please.

ZANDI: Yeah. In the stock market, I mean, you know, in my view it's because President Trump has promised corporate tax cuts. So, you know, if you lower the corporate tax rate, that means the earnings, the after tax earnings of businesses is higher and that goes right to higher stock prices. And he's also talked about less regulation in a lot of different industries, financial services, fossil fuel, the telecom, and IT industry. So less regulation means more profits, means higher stock prices. He's probably also going to take a less kind of a jaundiced view of

mergers and acquisitions. You know, the Biden administration has been pretty tough on M&A in effort to improve competitive pressures in industries to get prices down. But I think the Trump administration would be less likely to do that. So that's all positive for the stock market and that's why stock prices, I think, are up to the degree that they are.

KEILAR: Yeah. And Doug, what do you think about his tariff plan? What are your concerns there? What do you think he's actually going to proceed with and what he may not proceed with, considering he's proposed adding between 10% and 20% tariffs on every import coming into the U.S. with up to 60% tariffs on goods from China?

HOLTZ-EAKIN: Well, I certainly think his track record shows he'll do the specific tariffs on China and probably some other countries and goods. The wild card is the across the board 10% to 20% tariff. I have no secret insight as to the firmness of that commitment, the pace at which it will happen. But that is certainly the hardest, for example, on the Federal Reserve.

Right now, we have the tax code in place. And there are going to be a big debate next year about extending it to some extent or modifying a little bit. But that's current conditions. And the Fed's baked that into their calculations. Now, they have to consider the thought of a 10% to 20% tariff. What do they do? You can make the argument that you put the tariff in, it pushes up the costs, it pushes up prices, but the tariff only goes in once and they only go up once. So the Fed should just look the other way and go back to its business of controlling the long-term inflation rate.

I think Mark and I would understand that, but I'm not sure the public that's very weary of inflation and very upset about high prices is going to think looking the other way is a sensible strategy. So do they then try to control it somewhat?

[14:10:02]

Well, then their only option is to push interest rates back up and lean against what has been a very successful effort at a soft landing. So it's a real predicament for them to A, figure out what will he do, and B, how will they respond.

KEILAR: Doug and Mark, great insights. Thank you so much to both of you. You gave us a lot to think about and to maybe worry about in some cases, too. Thanks, guys.

ZANDI: Take care.

KEILAR: So today, President Biden speaking publicly for the first time since President Elect Trump's historic victory, hoping to turn down the political temperature across the country. He pledged to work with the Trump administration transition and promised a peaceful and orderly transition of power.

SANCHEZ: Meantime, we're learning new details about how Democrats are increasingly pointing fingers at President Biden for not exiting the race sooner. CNN's MJ Lee is live for us from the White House.

MJ let's start with Biden's remarks from the Rose Garden. Walk us through what he said.

MJ LEE, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yeah. You know, Boris and Brianna, there is a line that the President over the last few years has frequently used when talking about Donald Trump. And that line is, you can't love your country only when you win. And that was always in reference to Donald Trump's refusal to accept his defeat in 2020, his questioning of the integrity of the American election system. But today, when the President said this line in the Rose Garden, the audience was not Donald Trump. It was actually the millions of Americans that he understands is feeling very disappointed and is feeling frustrated by the idea of Donald Trump coming back to the White House for another four years.

The President said, you're hurting. I hear you and I see you. But what he insisted was that even though all of those feelings may be valid, the results of the election are what they are. And people around the country, even if they are disappointed, must accept those results. This is what he said.

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JOE BIDEN, 46TH PRESIDENT OF THE UNITED STATES: I've said many times, you can't love your country only when you win. You can't love your neighbor only when you agree. Something I hope we can do no matter who you voted for, is see each other not as adversaries, but as fellow Americans. Bring down the temperature.

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LEE: And among the President's most loyal supporters, there's a lot of sensitivity right now on how much blame is being placed on the President. A lot of folks that I've spoken to essentially saying, we wouldn't find ourselves in this position had the President decided not to seek a second term and sort of stuck to that initial promise of being a bridge and a transition president. The idea being that had the Democratic Party had been able to go through the process of nominating someone under the sort of protocols that are typically used in our political system, having the full runway, basically, perhaps it would have been Kamala Harris that was nominated, perhaps not, but that we wouldn't have seen this unusual truncated Kamala Harris campaign that resulted in her lose.

But there's also just a lot of anger that is being directed at President Biden himself and also some of those advisers close to him for their refusal over the recent years to tolerate any kind of criticism about his health and certainly any suggestions that the president should step aside. This is what one senior Harris campaign official told me. They said the, lack of a competitive process for a replacement that he didn't allow for that to happen. People are still angry about the shunning that they took for speaking out earlier about him.

So, Boris and Brianna, Democrats are clearly starting down the process of this soul searching after the events of this week. And the President's role in all of this is clearly going to be a very big part of that.

KEILAR: Yeah, certainly is. MJ Lee, live for us from the White House. Thank you. Let's talk now with CNN Presidential Historian Tim Naftali. Tim, this speech of Biden's, I mean, just because of the historic nature of these circumstances, it's a historic speech. What were your takeaways from it?

TIM NAFTALI, CNN PRESIDENTIAL HISTORIAN: Well, he really had -- President Biden really had two audiences. In part, this was a pep talk. This is a pep talk to members of administration apparently who were sitting right in front of him and to Democrats across the country. But this was also a way for the President to ensure stability, to make clear to every American that their vote not only counted, but it counted for him, and that he would assure the country and did assure the country of a peaceful transition. He didn't have to say, unlike in 2020, 2021. But the point was he wanted to make clear that he is not seeking revenge.

So it was a very successful speech directed at two audiences. But he said one thing that I think had a double meaning.

[14:15:02]

And he said, setbacks are unavoidable. Giving up is unforgivable. To many Democrats, that might be a reminder of his decision to wait late in the election cycle not to run again. It's very Biden. It's the essence of Joe Biden, someone who has had many setbacks over the course of his political career, but has always gotten up. And what many Democrats, of course, are debating now is whether he should have decided, if you will, to give up the opportunity of a second term just after the midterms.

I want to say one thing about that. Soul searching doesn't imply simply finding one fault historically to just blame an election on a previous incumbent, doesn't allow you to rethink the reason why in 2024, Vice President Harris could not keep the Biden coalition. As we see, as we work through the numbers, what we're seeing is that she wasn't able to get the same number of votes that -- and percentage that Biden had in many counties. I don't have the answer. But the answer isn't simply that Biden stayed too long. We don't know if inflation would have made it possible for Biden if he'd been healthy and vigorous to win. We also don't know whom the Democrats would have chosen if Biden had decided to be that bridge to the next generation in 2023 rather than 2024. So there are a lot of unknowns.

It's very interesting for me as a historian to see that people are just trying to find one causal explanation for the dramatic reemergence of Donald Trump as a national leader. The greatest comeback -- perhaps the greatest comeback ever, certainly the greatest political comeback since Richard Nixon last two nights ago.

KEILAR: Yeah. There may be multiple reasons. And they don't necessarily exclude each other from being legitimate. Tim, I wonder -- and obviously Biden is still in office. And there are still many parts of his efforts legislatively that Americans are just starting to see the effects of namely investments in infrastructure and in clean energy, etcetera. If those make it through the early stages of the Trump administration, I'm wondering what you think history, how you think history will look back at Joe Biden's legacy?

NAFTALI: Well, Boris, I can't speak on behalf of my future colleagues. But you know --

SANCHEZ: Sure, sure. I just mean --

NAFTALI: I don't think -- no, no, but that is a great question.

SANCHEZ: I just mean in the context of what we saw on Tuesday. In the context of what we saw on Tuesday.

NAFTALI: No, I'm not -- when I listened to Joe Biden today, and I'm not sure he'd be happy to hear this, when he was talking about the infrastructure bill and the fact that its benefits to all Americans won't really be felt for perhaps 10 years, it made me think of the rethinking of Jimmy Carter's time in office. Jimmy Carter set in motion the deregulation that liberated our economy, much of the credit for that, goes to his successor, Ronald Reagan. But in fact, it's Jimmy Carter who began that process of deregulating the airlines and other transportation systems, all of which helped the U.S. economy in the 1980s. He doesn't get credit for it, although now historians and others are beginning to relook at his time in office. That didn't help Jimmy Carter become a second term president, just as the infrastructure bill clearly didn't help that Biden-Harris team come and have a second term.

But historically, presidents, while they have to worry about four year cycles, are also the really good ones, are also investing in our future. And it takes a while for that future to be realized. And therefore, it takes a while for people to look back and say, hey, maybe I sold that particular president short.

SANCHEZ: Tim Naftali, always great to get your perspective. Thank you so much for being with us.

NAFTALI: Thank you, Boris. Pleasure.

SANCHEZ: When we come back, supporters of Donald Trump are now jockeying for positions in the new White House. We're going to talk about who could join his administration.

Plus, what Trump's second term could mean for the planet's future as new data shows the devastating impact of delayed action on climate change.

KEILAR: And how Democrats can win back support from Latino men. And can they after Trump's historic gains with that voting block? And throughout the hour, we're bringing you voters' reactions to Trump's victory. Here's what one man told CNN's Nick Valencia.

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MAN #1: I'm happy. I hope my portfolio goes back up 40%, gas goes down by half, and we start making a lot of money again.

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KEILAR: Right now, the big question, who will President elect Donald Trump appoint two top positions in his new administration?

SANCHEZ: Sources tell CNN that Trump allies are quickly jockeying for positions on the heels of his decisive victory. Let's take you live to West Palm Beach with CNN's Kristen Holmes just outside of Mar-a-Lago.

Kristen, what are you hearing?

KRISTEN HOLMES, CNN CORRESPONDENT: Well, Bryce and Brianna, I just got off the phone with one adviser to Donald Trump. He's not with the campaign, but it's somebody who has spoken to him on a number of occasions. And he said that Donald Trump is really taking this responsibility of filling an administration and a Cabinet much more seriously than he ever did before, that he has privately acknowledged that he thinks he made mistakes when it came to his first term, and that he wants to make sure he fills those positions with people who are competent and also very loyal to him. We know that loyalty is probably the number one issue for Donald Trump.

So just to talk about a few of the positions that he's currently looking at, one, of course, is going to be chief of staff. This is a critical position in the White House. It's going to be his right hand and somebody that he needs to be able to rely on under any circumstances. And we are told that the frontrunner in that position currently at this very moment is Susie Wiles, who ran his campaign, who was by his side after he left Washington in disgrace in 2021, after most Republicans were trying to distance themselves from the former President after January 6th, and hoping some of them that he would not be coming back into power. Susie remained by his side. She ran his campaign. And she ran it likely better than anyone we've ever seen run a campaign for the former President, getting him back into office, but also trying to control his worst and instincts, which we know is very hard to do. And she was obviously not always successful at that.

Now, the other position I want to talk about here is attorney general. This is going to be critical in a Trump administration as it is in any, but even more so because Donald Trump wants to make sure that he and the White House have complete control over Department of Justice. He's going to need somebody who is loyal to him in that sense. So here's a list of people we're talking about right now. Again, this is still shifting. Texas Attorney General Ken Paxton, Matt Whitaker, he served as acting AG under Donald Trump when he fired Jeff Sessions, Utah Senator Mike Lee is in consideration, John Ratcliffe, who served as the former Director of National Intelligence. Another person that we have not mentioned who's not on this list is Mark Paoletta, who is someone who's actually running the policy side of the Justice Department of Transition, just within the transition here, and somebody who a lot of people would like to see inside of a White House.

So these are just the beginning. But we are told that Donald Trump might make some of these decisions within the Cabinet in the next week. So we'll have our eyes open. And we were talking to as many people as we can to hear who's in -- who's up and who's down.

SANCHEZ: Kristen Holmes from West Palm Beach, thank you so much for the update. A huge part of Donald Trump's win can be attributed to the Latino community, particularly Latino men. Exit polls show that 55% in this demographic favored Trump. That's up nearly 20 points from the last presidential election.

KEILAR: And here's what we heard from two Latino men in the battleground states of North Carolina and Pennsylvania.

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MAN #2 (THROUGH TRANSLATION): It affects me because I'm Latino. You know how the relationship between Trump and Latinos is. That's him against. The pro is that he's already been president. He already knows how to run a country. It's fine. I agree. I'm not entirely against it.

MAN #3 (THROUGH TRANSLATION): We have to see how this man is going to come. If what he promises, which was the first thing he said in the early morning, the first thing he's going to do is fulfill his promises of government. And as a Latino, you feel a certain disdain or what his colleagues in Puerto Rico said, and how he contemptuously speaks of Latino at the last minute he wanted to look for them. But this has surprised me a lot.

(END VIDEO CLIP)

KEILAR: All right. Joining us now to talk about this further, Former Communications Director for the Congressional Hispanic Caucus, Kristian Ramos, and National Political Reporter for the Washington Post, Sabrina Rodriguez.

And Sabrina, we should look at where the shifts are because they are broad across the board. Cuban-Americans in Miami Dade, Puerto Ricans in Osceola County, Mexican Americans in the Rio Grande Valley, Trump made gains with all of them.

SABRINA RODRIGUEZ, NATIONAL POLITICAL REPORTER, THE WASHINGTON POST: He did. And I think, you know, after the 2020 election, we were having a similar conversation about Trump making inroads with Latino voters. But a lot of the narrative was then kind of written off to South Texas and saying, oh, it's just some of the Mexican Americans in South Texas. Oh, it's the Cuban-Americans in Miami. Oh, maybe some Venezuelans in Miami.

But this is undeniable. It is undeniable that a shift has happened, that a shift has happened toward Donald Trump, that he had a message that resonated with more Latino voters than even the polling showed us it would. And of course, I think there's always the added caveats that, you know, exit polling will evolve in the days to come. You know, we might see some shift in some of the numbers from these states. But the reality is, that something did resonate. And that's a larger conversation to be having with the Democratic Party.

SANCHEZ: And it's a conversation that some of us have been having for years now, Kristian, in part because you could see the trend sort of growing. You and I had discussions months ago talking about the messaging to Latino men. And you, to a degree, were questioning some of the stuff that was coming out of the Harris campaign.

KRISTIAN RAMOS, FORMER COMMUNICATIONS DIRECTOR, CONGRESSIONAL HISPANIC CAUCUS: This is what I think we have to have some deep soul searching within the Democratic Party. And it is with working class voters, period, writ large. And the thing that we have to figure out here is how do we talk about the economy in way that resonates with them?

And what I mean by that is Trump had no actual policies aimed at Latinos that would help make their lives better on the economy. He did have a cultural argument that was laced within the economy, which was very precise, saying to Latinos, democrats care about this group more than they care about you. I will take care of you. Kamala Harris actually had policies that would help Latinos, has helped Latino quite a bit over the last four years. They didn't feel that in the way that they did when Donald Trump was having these conversations in a way that was laced in cultural attacks. Democrats care more about immigrants. They care about this other group more than they care about you. I will take care of you. That has to be addressed with working class voters sooner rather than later if we're ever going to get back to where we were with Latino voters.

KEILAR: Okay. Kristian, so how do they address that? Because sometimes in the past, I mean, I remember covering the Obama administration, and he would -- he said famously once, basically --

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