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FBI to Investigate Cocaine at White House, Supreme Court Decision Leak; Trump Frustrated He Hasn't Received Promised Memorandum of Peace Outlining Russia's Ceasefire Terms; Chaos Erupts on First Day of U.S.-Backed Aid Distribution in Gaza; Trump Planning to Cancel All Federal Contracts With Harvard; Judge Holds Hearing on Trump Move to Ban International Students at Harvard. Aired 2-2:30p ET

Aired May 27, 2025 - 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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[14:00:42]

BRIANNA KEILAR, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": A veiled threat from President Trump saying that Russian leader Vladimir Putin is playing with fire as the White House is running out of patience with what it sees as Moscow dragging its feet on talks to end the war with Ukraine.

BORIS SANCHEZ, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": Plus, a former employee of Sean "Diddy" Combs taking the stand at his criminal trial, describing how the rap mogul told her she couldn't have a life while working for him and also threatening to kill some of his rivals. And the FBI launching a new effort to solve mysteries that have fired up the president's conservative base, including cocaine found at the White House back in 2023, and the question of who leaked that draft of the Supreme Court's Dobbs decision. We're following these major developing stories and many more, all coming in right here to "CNN News Central."

KEILAR: President Trump is warning Vladimir Putin today that he's "playing with fire" as the president grows increasingly frustrated with Russia's escalating attacks on Ukraine. Sources are telling CNN the president is now considering new sanctions on Moscow as Russia continues to unleash multiple days of air assaults on Ukraine. Overnight, Russian strikes pounded numerous parts of the country.

Ukrainian officials say that at least two people were killed in these attacks and that 16 others were wounded. In the meantime, Moscow is lashing out at a decision by Germany and other Ukrainian allies, including the U.S., to lift this ban that has been in place on firing long-range missiles well into Russia. This is a decision that the Kremlin is calling dangerous. CNN's Kristen Holmes is with us now from the White House. Kristen, what's the latest?

KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yeah, Brianna, we have some new reporting on why exactly, or at least one of the reasons that Donald Trump has seemingly shifted so hard on his posture when it comes to Vladimir Putin. And this is actually regarding the call that the two had last week. Of course, as we have reported, Trump and his team have been grieved aggrieved by the fact that Putin has ramped up these attacks in Ukraine. But there's another part of it as well, which is when the two leaders were on the phone that two-and-a- half hour long phone conversation, Vladimir Putin agreed to draft up what he called a memorandum of peace, which would essentially lay out the Russian requirements for a Ukrainian war ceasefire.

He would then give this to both Ukraine and the United States and he said he would do so in the coming days. Now, it has been over a week since that phone call and no one has seen this document. So, this is leading to this frustration here. Now, we have a response from Russia saying that Moscow is still working on the document, but you can see why exactly that Trump is now "putting on the heat." That's what one person told me about Trump's ramp up in rhetoric here.

The other thing I want to mention that we learned that Donald Trump talked about on this call with Putin was that he said that Russia and the Ukraine should be communicating directly, that there shouldn't be intermediaries, that Europe and the United States were there to help, but that these two countries should be communicating directly. One of the reasons this is so interesting, again, is it seems as though Donald Trump has been pulling himself out of these negotiations, something that we know that he once said he was going to be in control of.

KEILAR: And Kristen, we are both the parents of small children and it's interesting that sometimes foreign policy mimics that. You don't threaten something if you're not willing to follow through with it. And you hear Trump saying, he's talking about sanctions and yes, he seems to be threatening more strongly than he did before, but what would actually make him follow through on that threat?

HOLMES: Yeah, I mean, look, this is the big question, right? Because when you talk about these sanctions, we had learned that over the past several weeks, some of Donald Trump's administration had been drafting up new potential options to punish Moscow, which would possibly be increasing those sanctions. But after that phone call, Donald Trump seemed to really brush sanctions off the table.

It wasn't just Trump, it was actually J.D. Vance as well. They were more talking about economic partnerships, saying behind the scenes that sanctions, they weren't sure worked. Now, you've seen a real shift in tone from Trump. Now he hasn't approved any of these options, and again, it is unclear what it would take to actually move him over the line there. Right now, we're waiting and seeing, particularly as they wait for this memorandum of peace.

[14:05:00]

KEILAR: All right, Kristen, thank you for that report, live for us from the White House. Boris?

SANCHEZ: Now to the humanitarian crisis in Gaza, thousands of desperately hungry people, many of them women and children, overran a newly established aid site today. This aid now trickling in for the first time since Israel eased its 11-week long blockade that prevented all food, medicine, fuel, or other goods from entering the enclave, pushing more than 2 million Palestinians toward famine.

The new aid distribution is being handled by a private organization backed by Israel and the United States, and it has been strongly criticized by the United Nations and other aid agencies. Let's take you now live to Jerusalem with CNN's Jeremy Diamond. So Jeremy, what can you tell us about this aid, how it's being distributed and how much is expected?

JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Well, what we saw today on the first fully operational day of the Gaza Humanitarian Foundation were scenes of absolute chaos and mayhem, as thousands of desperately hungry Palestinians flooded onto this newly open secure distribution site in southern Gaza. You can see in videos from the scene, as thousands of people, men, women, and children went over the barriers surrounding this site, broke down fences, all of this to try and grab some of the last remaining parcels of food that were at this site.

This actually prompted the American security contractors who were securing this site to actually have to leave the area and withdraw altogether. I'm told by a security source that this was part of the protocol, something that they had prepared for and anticipated in order to avoid any instances of violence. And I am told indeed that no American security contractors opened fire on this crowd. There were gunshots, however, in the area that appear to have come from an Israeli military position, not in the immediate range of that site.

Ultimately, security contractors did regain control of this site and I'm told that the Gaza Humanitarian Foundation actually was still able to distribute about 8,000 food parcels, and that they plan on being operational tomorrow at that site once again.

SANCHEZ: And Jeremy, talk to us about why the group that's distributing this aid is controversial.

DIAMOND: Well, the United Nations and other humanitarian agencies have said they will not participate in this new mechanism because this is a mechanism that was only created because Israel refused to allow aid into Gaza any other way. Israel has long accused Hamas of stealing aid and profiting off of it. That's an accusation that Hamas, as well as these humanitarian agencies have denied, that there's any kind of wide scale diversion of aid in Gaza.

But nonetheless, because of that, Israel and the United States effectively created this new mechanism. The Gaza Humanitarian Foundation emerged out of that. And so, there are concerns from this humanitarian groups that there is a lack of autonomy and independence and impartiality on behalf of this group, that it could also facilitate the forced displacement of Palestinians because so many of these sites are in southern Gaza, away from -- in the direction actually of where the Israeli military ultimately wants to push the Palestinian population.

And then there's also the concern that this could increase the dangers to Palestinians because they'll have to walk long distances to be able to pick up these parcels of food. In fact, the Gaza Humanitarian Foundation's executive director resigned on Sunday out of a concern about that lack of autonomy. Nonetheless, this new mechanism is indeed up and running, albeit with a chaotic start here and says that it intends to continue to ramp up to be able to distribute food to up to 60 percent of Gaza's population within its first week of operations, and then ramping up from there.

But again, major questions over whether or not they can do that given the situation on the ground, the lack of participation from the biggest humanitarian agencies in the world, and questions about their funding sources as well. Boris?

SANCHEZ: Jeremy Diamond, live force in Jerusalem. Thank you so much for that update. Brianna?

KEILAR: President Trump is planning to sever all remaining contracts with Harvard today, according to sources. These are government contracts worth roughly $100 million and this escalation comes just days after he threatened to axe an additional $3 billion in funding for the university as legal battles are playing out in court. Just a short time ago, the first of two key hearings happen -- that are happening this week took place and we have CNN's Katelyn Polantz following this for us. What's been going on?

KATELYN POLANTZ, CNN CORRESPONDENT: Well, Brianna, today, they were in court just for the moment, checking in with Judge Allison Burrows in Boston, who's overseeing a whole group of cases that are Trump v. Harvard or Harvard v. Trump in different ways.

[14:10:00]

What the judge is doing is figuring out how to move forward on the student visa program issue. That's the program that the Department of Homeland Security wanted to immediately stop at Harvard. The judge stepped in on Friday and said, that's not going to happen right now, but we're going to have a big hearing. That big hearing is going to be on Thursday. So, the check in this morning was the judge talking to both sides about let's get ready for this very big hearing on the legal issues around student visas and allowing international students on Harvard's campus.

But it's not just about that. There are several other cases, including ones about money that can go to Harvard from the federal government, and in those cases, all of it is going to pull together Harvard's arguments that the Trump administration is retaliating against them. I was just talking to one of the lawyers involved in some of these cases and that person told me these cases, this is really about academic freedom at universities across the country. It's not just money. It's not just international students. It's not just Harvard. It's way bigger than that.

KEILAR: And they basically say in their filing, they're not even pretending, like the retaliation, right, is pretty clear in this. What do we know about these latest federal contracts that Trump wants terminated?

POLANTZ: Right. So Brianna, there's been sort of a laundry list that the White House has worked through of telling Harvard they either wanted to, or they are cutting money in all of the mechanisms that they can to Harvard. They've done it with NIH grants for research funding, healthcare funding, that faculty use for their researches. That's the big one. That's the big pot, more than $2 billion of money there. That's created one of these lawsuits. But then today, the White House is saying $100 million. So more like chump change for Harvard in a little bit of a way, although that's still a lot of money where the federal government says we're going to cut federal contracts with the university and GSA is going to tell people who have those, send them to other universities or other places than Harvard.

KEILAR: Yeah. The principles of it are very important, even if $100 million might be chump change to a school with a giant endowment, they might argue that that's not the point, right? Katelyn, thank you so much. Really, really appreciate your fine reporting.

And still to come, it's a stress test for the economy facing a reignited trade war and a bond market revolt, investors brace for what could be a revealing week when it comes to the impact of Trump's policies. Plus, stunning testimony from a former assistant to Sean "Diddy" Combs, who claims she was locked in a room, faced death threats, and then was forced to take a lie detector test during her employment. And later, the FBI's deputy director says the bureau is looking into several prominent unsolved cases. We'll tell you which ones.

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[14:17:35]

KEILAR: U.S. stocks are on the rise today on news that President Trump is delaying his new 50 percent tariffs on the European Union, and after the E.U. said it's willing to fast track trade talks with the U.S. Wall Street also getting a much needed boost from a new Consumer Confidence Report which came in higher than economists had expected. CNN's Matt Egan is with us now on this. Tell us about the big takeaways from this Consumer Confidence Report, Matt.

MATT EGAN, CNN REPORTER: Well, Brianna, Americans are feeling a lot better about the economy after a scary March and April. We saw the consumer confidence in May went up. It went way up. This was better than expected. In fact, this was the biggest one-month increase for consumer confidence in four years. And when we look at the trend, you can see that confidence really took a hit at the start of this year.

You see this really sharp decline in consumer confidence. This, of course. was happening as the president was ratcheting up tariffs and as the stock market was plunging, in fact, confidence had really gotten to the lowest levels since COVID, which is pretty stunning when you think about it. But now, we do see this significant uptick coming as there's been some de-escalation in the trade war. And obviously, this historic rebound on Wall Street is also helping to boost confidence. And when we look at the internals of this report, there are a lot of positives here, right?

People are feeling a lot better about the current situation. Their short-term outlook went way up. This was the biggest one-month increase for this metric since 2009 during the Great Recession. Also recession fears, they went down and this was a widespread shift in sentiment. The Conference Board, which conducts this survey, said that the rebound in confidence was broad based across all age groups, all income groups. They also say it was shared across all political affiliations with the strongest improvements among Republicans.

Now, this is important of course, politically for the White House and for Republicans in Congress. But economically, this is significant because consumer spending is the biggest driver of the U.S. economy. And so the fact that consumer confidence has rebound, it's obviously still at relatively low levels, but it's starting to move in the right direction. That is good news. Brianna?

KEILAR: What's driving the big rally on Wall Street, Matt?

[14:20:00]

EGAN: Yeah, well, when you take a look at the market, you see the Dow, the S&P and the Nasdaq, all solidly higher, a 2.4 percent increase for the Nasdaq. This is a familiar playbook, right? Every time we see the president ratchet up tariffs and tariff threats, we see the market drop. And when he walks back those threats, the market rebounds, and we're seeing that happen again. This time, the focus is on the president's threats around E.U. tariffs. Now, just to remind you where we are there, back in early April, the president said he put a 20 percent tariff on the European Union, America's biggest trading partner.

Then when markets freaked out, he walked it back 90-day delay. Instead, he put this 10 percent universal tariff on. Then on Friday, the president really startled investors by saying, actually, we're going to do a 50 percent tariff and it's going to start on June 1. And then, after a positive phone call with officials in the E.U. over the weekend, the president said that those tariffs are going to be delayed until July 9.

Now, when you look at the trend for the market, you see markets have continued to rebound from this really sharp decline earlier this year. This was all driven by trade war, all driven by worries about a recession. But now, we have this historic rebound with the market really coming back from most of those losses. But, it does seem like we're still going to be held hostage in some ways to the ups and downs of the trade war.

I talked to market veteran Art Hogan, and he said, look, unfortunately, in this scattered-brain haphazard delivery of trade war news, this market will be held hostage by every tariff utterance on social media. And so, Brianna, it does seem like at any moment, we're basically one Truth Social post away from either a 700-point rebound in the market or a 700-point drop. You just can't look away because the trade war news is coming just so fast.

KEILAR: Fun times. Matt Egan, thank you so much. Boris?

EGAN: Thanks, Brianna. SANCHEZ: Let's discuss these fun times with Scott Lincicome. He's the Vice President of General Economics at the Cato Institute. Scott, great to see you, as always. So, you have the biggest monthly jump in consumer confidence in almost four years. The market is rallying on that. You, though, have described it as a stay of execution. Why?

SCOTT LINCICOME, VICE PRESIDENT, GENERAL ECONOMICS, CATO INSTITUTE: Well, there's a few reasons. The most obvious is that none of the tariffs have really gone away. All of the tariffs that the president has proposed on Liberation Day, the ones that tanked the markets, well, those are simply paused until July. So, we could be back right at the same point in just a few weeks. But the other thing is that tariffs actually still remain quite high in historical terms, and we're looking at 15 percent, 16 percent and that's higher than any point going back almost a century. And that's going to eventually hit the real economy.

You hear producers talk about high raw materials prices, companies, retailers talking about compressed margins, and companies like Walmart saying eventually, once their inventory dwindle down, they're going to have to pass those prices on to consumers. And so really, we can celebrate these walk backs in these E.U. deals, but there's a lot of time left to see what we're really going to get for the real economy.

SANCHEZ: How soon do you think that impact is going to be felt and what happens if we get to July and these hundred plus trade deals with partners all over the world haven't been ironed out? Do you anticipate more delays?

LINCICOME: I do. And I think that's one of the things that the markets are responding to is optimism that a lot of this stuff goes away. That we end up with a few tariffs here, a few there, but this big Liberation Day push of tariffs of, at one point for China, over a hundred percent; for Vietnam, almost 50 percent; and then this new E.U. threat at 50 percent. The markets think those are never going to actually materialize, that a lot of that stuff will just keep getting punted down the road.

And there is some good reason to think that. The president has continuously shown that he does get a little skittish when markets tank or when the bond market starts having problems. And if that continues, if you know some -- there's this worry that things are coming back, then again, I think there is good reason to think they'll delay again.

SANCHEZ: Supporters of the president point to these tariffs as having an immediate impact on getting leverage. And you specifically mentioned China and the a hundred plus percent tariff that had been installed and then lowered to 30 percent, that's been his main target. And the labor market in China has been struggling. There was an estimate that was cited by The New York Times that if tariffs stay at current levels, China could lose 6 million manufacturing jobs. If they go back over a hundred percent, that could reach 9 million.

I wonder if you see that as a win for the United States. If that could be used as leverage to force Beijing to start playing by the rules as the Trump administration says?

[14:25:00]

LINCICOME: Well, it's really difficult because of the Chinese government. They are not nearly as responsive to economic turmoil as is democracy like the United States. So, I think it's a bit of a gamble to say that real economic losses that happen because of this trade war in China really push the Chinese government to negotiate. I mean, look, we've had tariffs on Chinese imports at 25 percent or higher for years now, going back to about 2018. The Chinese government has not caved. They have not changed any of their problematic economic policies.

And so, simply just ratcheting up tariffs more and expecting a different response, I think, is extremely risky, especially given the real damage this is also having for the U.S. economy. There are a lot of American businesses out there that are buying things from China that are not national security related, and that suddenly, they're facing huge tax bills of thousands or hundreds of thousands of dollars. That's going to -- that's a tough bullet to bite for those companies.

SANCHEZ: Scott Lincicome, appreciate the analysis. Thanks for joining us.

LINCICOME: My pleasure.

SANCHEZ: So, we're following a brand new week of testimony in the Sean "Diddy" Combs trial. On the stand today, a former assistant who says that she saw Combs break into the home of a fellow rapper and romantic rival. And singer Billy Joel's family is speaking out for the first time about the singer's brain disorder diagnosis. We have neurosurgeon, Dr. Sanjay Gupta, joining us to explain this rare disorder. Don't go anywhere.

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