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James to Ask Judge for Dismissal; Nick Brown is Interviewed about the Letitia James Case; U.S. Inflation Back at Three Percent; Polls on Americans and the Economy; Trump Heads to Asia; Microsoft Draws Clear Line on A.I. Aired 8:30-9a ET

Aired October 24, 2025 - 08:30   ET

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

[08:30:00]

KATE BOLDUAN, CNN ANCHOR: As two of the teams connected to the case are hitting the court tonight. More than 30 people were arrested in this investigation the prosecutors say involved rigged poker games, insider sports betting and mafia ties.

FBI Director Kash Patel said this last night.

(BEGIN VIDEO CLIP)

KASH PATEL, FBI DIRECTOR: These individuals got in bed with La Cosa Nostra and four of the five major crime families in New York City to create gambling empires, to rob people of their money, to extort people, to commit acts of wire fraud, to rig games and poker games and basketball games just so they can make a few extra bucks.

(END VIDEO CLIP)

BOLDUAN: Among the NBA figures indicted, Miami Heat guard Terry Rozier, former NBA player Damon Jones and Portland Trail Blazers Head Coach Chauncey Billups. Rozier's attorney strongly is refuting and pushing back on the accusations, saying this, and I will read you part of the statement, which is, "they appear to be taking the word of spectacularly incredible sources rather than relying on actual evidence of wrongdoing."

The scandal is forcing players and coaches to address how gambling continues to impact the game. Warriors Coach Steve Kerr said last night, with the NBA partnering with gambling companies, that his players now face, quote, "the wrath" from fans who bet on games.

(BEGIN VIDEO CLIP)

STEVE KERR, GOLDEN STATE WARRIORS COACH: It's just kind of the modern life, you know, social media, everyone having access to everyone else. And, yes, it's rough. I mean, I feel bad for our guys. I've gotten some emails in the past, like, you know, from people I don't know saying, hey, thanks a lot, I had money on the game tonight and you screwed up by subbing so and so in.

(END VIDEO CLIP) BOLDUAN: Geez, that's -- we're going to continue to follow the developing -- because this case and this indictment is remarkable. We'll continue following this and bring you updates.

Also new this morning, the man accused of sparking one of California's deadliest wildfires has pleaded not guilty in court. Federal prosecutors say that he started a small fire on New Year's Day that smoldered underground then for a week before reigniting into what became the Palisades Fire. You're going to remember that deadly blaze. It killed 12 people, destroyed thousands of homes across Malibu and Pacific Palisades. The defendant claims that he is being made a scapegoat, and argues that firefighters failed to fully extinguish the first fire before it reignited. If convicted, the 29-year-old faces up to 20 years in federal prison. His trial is set for December 16th.

And the Louvre robbery has apparently inspired a new tongue in cheek ad. What could go wrong? The German company that made the furniture lift that -- that lift that was used, which apparently was used to haul the $100 million worth of jewels from the museum, posted this. The ad says, "transport your treasures and move things quickly with their lift." I mean, come on, guys. It shows a photo from -- of the lift outside the museum. Police are still trying to track down those thieves.

Sara.

SARA SIDNER, CNN ANCHOR: I'm going to just shut up about that.

BOLDUAN: I mean --

SIDNER: That's uncomfortable. I feel uncomfortable in my skin.

BOLDUAN: No press is bad.

SIDNER: Yes.

BOLDUAN: I mean.

SIDNER: But we're talking about it, which is part of the problem.

BOLDUAN: I mean, there we go. There we go.

SIDNER: The issue.

All right, thank you, Kate.

In just a few hours, New York Attorney General Letitia James set to face a judge as she seeks to have her indictment dismissed. James' legal team citing President Trump's recent appointment of the U.S. attorney in charge as a reason for the case to be tossed. It's the same argument that former FBI director James Comey is making in his case. You'll remember Trump publicly pressured the attorney general to go after both Comey and James.

CNN's Kara Scannell is outside the federal courthouse in Norfolk, Virginia. KARA SCANNELL, CNN CORRESPONDENT: Good morning, Sara.

New York Attorney General Letitia James will make her first court appearance just a few hours from now. She is expected to plead not guilty to one count of bank fraud and one count of making false statements to a financial institution. This all relates to a mortgage she took out, and prosecutors say that she'd taken out the mortgage as a second home, but instead used it as a rental property, benefiting from a more favorable interest rate.

Now, James has called this baseless. Her team is expected to launch an aggressive legal challenge. Already, they have indicated that they are going to try to challenge the validity of the appointment of the U.S. attorney for the Eastern District of Virginia, Lindsey Halligan. She was Trump's pick to run the office after the prior U.S. attorney, a career prosecutor, had resigned because he didn't believe that there was enough evidence to bring this case, as well as the case against FBI Director James Comey. So James' legal team teeing up that that is something that they are going to ask the judge to weigh in on and seek to dismiss this indictment.

Now, they also have asked the judge to prohibit Halligan from making any statements outside of the courtroom about this case. This relates to comments that she had made with a reporter that was released in text messages. They are looking to try to challenge what she says outside the courtroom and in the filings made to the judge yesterday, they wrote, "as the prosecutor who is handling the case against Attorney General James and purporting to be the U.S. attorney, Ms. Halligan is supposed to be the standard bearer of the professional responsibility rules rather than the district's violator in chief."

[08:35:05]

Now, sources tell us that Halligan will be in court today at this hearing. It's expected to take just a few moments, and then we might hear from the New York attorney general herself as she's leaving court.

Sara.

SIDNER: All right, our thanks to Kara Scannell there outside of court.

Kate.

BOLDUAN: All right. And joining us right now to talk more about what Tish James is facing is the attorney general of Washington state, Nick Brown.

Attorney general, thank you for being here.

NICK BROWN (D), WASHINGTON STATE ATTORNEY GENERAL: Thank you for having me.

BOLDUAN: So, the attorney general, she's going to ask to have her case be dismissed, as Kara Scannell was laying out. What do you think this day and this case represents? BROWN: Well, I think it really represents a sad moment in American

history of our justice system. What we've seen is explicit targeting of political opponents, we've seen bogus prosecutions. And the fact that my colleague, Tish James, is now facing these charges is really damaging, not only for her, but I think for the entire justice system as a whole.

BOLDUAN: So, she stands accused of lying about the purpose of buying a house in Virginia in 2020. Prosecutors say that while she said the house would be a secondary residence, she, in fact, use it as a rental investment property, renting it to a family of three, and that she misled the bank to get a favorable mortgage. How would you focus her defense in this case if this continues, if it's not, you know, summarily dismissed? Would you focus on the mortgage and the facts in the case, or do you focus on the Donald Trump element of retribution here?

BROWN: Well, I think you focus on all areas to defend herself as much as possible. And I'm a former U.S. attorney myself. I would start where A.G. James is starting, attacking the validity of the appointment of the woman that's leading this charge. The fact that the former U.S. attorney, who was, by all accounts, a lifelong prosecutor and a Republican, was forced out, fired and had to resign because he refused to bring charges in this case, the fact that the current U.S. attorney is bringing in other prosecutors from outside of the district to handle the case with her because no one else in that office will take the case, is really an indication of the politicalization of this case. And so, I would start there.

But then if you just look at the substance and the merits of this case, I think they're alleging about $18,000 over 30 years of personal benefit for A.G. James. That is a case that would never be brought by any serious U.S. attorney in any case. And having worked for the Department of Justice for many years myself, I just know how flimsy this case looks from the outside.

BOLDUAN: So, one thing that is noted about A.G. James is how -- when she herself was campaigning for her -- her -- her post, that she pursued confrontation with Donald Trump, saying during the campaign that she'll be shining a bright light into every dark corner of Trump's real estate dealings. Also saying at one point, "oh, we're going to definitely sue him. We're going to be a real pain in the ass" Leading some to suggest that she put a target on her back. Do you think that's the case?

BROWN: Well, it's really clear that this president has been trying to go after and take retribution against anyone who was critical of him or his business dealings or anything that he took as a personal offense. And so, what I heard A.G. James talking about during the campaign was shining a light on what we all understand to be years of malfeasance by the -- by the president in his prior life as a businessperson. And so, talking about going after and holding the person responsible for actual offenses is one thing.

On the other hand, the president has been telling people that we want to go find charges, you know, investigate people, not necessarily responding to any specific allegations. So, the fact that we now have this case that is really flimsy on its face is an indication that he was targeting her and not crime. And that is very different from what we've seen, you know, throughout the history of the Department of Justice.

BOLDUAN: From your unique perspective, as a top law enforcement officer of a state as well, do you think one can be an effective state attorney general while under federal indictment? Do you think that this case, as she needs to focus on it, affects her ability to do her job?

BROWN: Well, look, we all know how talented and hardworking A.G. James is. She is a leader amongst the attorney general community. She has a stellar record of doing great work. Obviously, being the target of not only just a case, but a case specifically pushed and authorized by the president of the United States is going to be tough on her. But I have tremendous confidence in her. She has a tremendous team. All of the A.G.s across the country are now working together on many, many different cases to respond to the unconstitutional, un-American, unlawful actions that we're seeing from the president. And I know that they will continue to do that.

But I -- I feel bad for A.G. James that she has to deal with this very serious allegation. But I also know that, and have confidence in her team, that they can try to resolve this case as soon as possible, because they have incredibly important work to do on behalf of the people of New York. Much -- much of that has national impact.

[08:40:01]

And, you know, if anyone can stand up to this attack, it's A.G. James.

BOLDUAN: Well, one important step, though it will be happening today, as she's about to be heading into court.

The attorney general of Washington, Nick Brown, thank you for coming in. Thanks for your time.

BROWN: Thank you, Kate.

BOLDUAN: All right, so we have breaking news. Just moments ago, new inflation data just out, giving us another snapshot of how prices are trending, what direction they're headed for Americans.

CNN's Matt Egan is with me now.

Tell me, what's coming in?

MATT EGAN, CNN REPORTER: Yes. Well, unfortunately, Kate, the snapshot is not a pretty one because we're back to 3 percent inflation in the United States for the first time since January. So, these new numbers out show that prices were up by 0.3 percent between August and September. That's actually slightly better than expected.

BOLDUAN: OK. EGAN: However, the annual inflation rate moved in the wrong direction, from 2.9 percent to 3 percent. And as I mentioned, that is a new eight month high for inflation. And when you --

BOLDUAN: It is higher (ph).

EGAN: Yes. And when you look at the trend, what's important to remember is that inflation was going in the right direction, right?

BOLDUAN: Yes.

EGAN: Earlier this year, back in April, inflation went down to 2. percent. That's the dip in the middle of that chart.

BOLDUAN: Look at that graph. Yes.

EGAN: So, that goes back to September, back when then candidate Trump was on the campaign trail saying inflation was out of control. But you can see, clearly, we're in a worse spot now than we were last fall --

BOLDUAN: Wow.

EGAN: When inflation was maybe the biggest issue, certainly the biggest economic issue on the minds of voters.

BOLDUAN: Absolutely.

EGAN: So, that's pretty telling.

And when we dig into the categories to try to understand the why here.

BOLDUAN: Yes.

EGAN: OK. Gasoline prices did go up between August and September, right? So, during the month of September, prices were up. In fact, gas prices increased by about 8 percent on a monthly basis. That was the biggest monthly increase in about two years.

But this is not just about gas prices, which are, you know, they're still relatively low, even if they went up.

BOLDUAN: That -- yes.

EGAN: They're also -- this is about the grocery store, which is another pain point for consumers and which --

BOLDUAN: They're still high.

EGAN: Right, which is also being driven in part by tariffs, because we did see significant increases for a number of different items, canned vegetables, ham, other items of food went up.

But then there's other tariff exposed items that have gotten more expensive. For example, apparel. Apparel went up by almost 1 percent on a monthly basis.

BOLDUAN: They warned this was coming. They warned that it was coming in the fall.

EGAN: Right, because so much of the clothes is -- they're imported. So, they are exposed to those tariffs. Girls apparel jumping by almost four percent on a monthly basis.

And then two other things that are exposed to tariffs that I'll just call out. Appliances. They went up significantly by about two percent. And also some -- some furniture increased significantly. And we know that furniture just got tariffed by the president.

So, look, you put it all together, inflation is not as bad as some had feared it could be, right?

BOLDUAN: Yes.

EGAN: And it's certainly not the nightmare of three and a half years ago, OK. But, at the same time, as you know, inflation, it's -- it's cumulative. There's a snowballing effect. So, the fact that we're getting uncomfortably high inflation right now, after years of very historically high inflation, that's why this is so painful. And, look, it's -- it's contributing to the two speed economy, right? People at the top, who have money in the market, they own their homes, they're doing OK. They could absorb these price increases. But a lot of people who are living paycheck to paycheck, not so much, right? They are really the ones who are hurt here. So, this is contributing to that k- shaped economy.

BOLDUAN: Yes, this is not where any administration would want it to be at this moment, for sure.

EGAN: No, especially when the cost of living is just such a salient issue right now.

BOLDUAN: It's great to see you. Thank you so much for bringing it to us.

EGAN: Thank you, Kate.

BOLDUAN: Sara.

SIDNER: All right, let's talk about the government shutdown. It's the second longest in U.S. history. And as it drags on, since we're talking about the economy leaving hundreds of thousands of Americans without a paycheck, how are Americans feeling right now about the economy?

CNN's Harry Enten is here now to run the numbers.

A lot of talk about the economy.

HARRY ENTEN, CNN CHIEF DATA ANALYST: Yes.

SIDNER: You just heard those numbers, that inflation going up, which is not what anyone wants to see. But you said you found something surprising about how Americans feel about the economy. ENTEN: Yes, quite surprising. I would -- honestly, sometimes you look

at the numbers and you just go, whoa, it kind of pops off the screen. This is going to be a contrarian take.

What are we talking about? Well, you know, Matt was mentioning about the econ playing such an important role in last year's presidential election. The top problem facing the U.S. is economic per Gallup. Last year, look at this, 43 percent at this time, 43 percent of Americans said the top problem was economic.

Come to this side of the screen. It's just considerably different. We're talking about 24 percent. We're talking about a drop of nearly 20 points. And more than that, we're talking about across all of the different political groups, right, Democrats, independents, Republicans. We see that the percentage who say the top problem is economic has been falling, has been falling, has been falling through the floor.

And more than that, you know, we're talking about inflation. The percentage of Americans who say that the top problem is inflation has also been falling, which is, I think, very surprising given all the news that we are hearing about the economy.

[08:45:02]

SIDNER: It really is surprising.

How does this compare to like the historical look at how people feel about the economy?

ENTEN: OK. So, you know, let's talk about -- we'll go through history, right. Let's take a look. The top problem facing the -- facing the United States is economic. And the average midterm election, it's 35 percent, it's 35 percent.

Look at where we are now. Again, it's 24 percent. It is lower. Fewer Americans right now are saying the top problem is economic than historically have said that the top problem is economic. So, it's not only that the top problem being economic is lower than we were at this time last year. It is lower than we have historically been, despite all the news about how the economy is supposedly softening.

So, you just look at these numbers, and you just go to yourself, wait a minute, there's something going on here with the American public whereby you're getting all this economic news, but yet the percentage of Americans who say the top problem is economic has actually been falling and is lower than it normally is.

SIDNER: It's fascinating.

All right, how are people feeling about the shutdown vis a vis whether that's having an impact on the economy?

ENTEN: You know, the story of this segment has essentially been that fewer people are saying that the economy is a top problem than historically were or were a year ago. And so, perhaps not surprisingly, we'll end on this note. Harm shutdown is having on the economy, a great deal or quite a bit. Back in 2013, the last time we had this measure during a shutdown, it was 65 percent. You come over to this side of the screen. Again, it's significantly lower. It's 48 percent. It's less than a majority.

So, what we're talking about here is, again, fewer Americans are saying the top problem is economic compared to last year and historically. And what we're seeing is fewer Americans are saying that the shutdown is causing a great deal or quite a bit of harm to the economy.

So, at this particular point, yes, it is true that perhaps Americans don't like the direction that the economy is going. But where it ranks on their list of issues, he's actually been falling.

SIDNER: This is fascinating. Thank you so much, Harry. That is a contrarian report to --

ENTEN: A contrarian -- a contrarian report from a contrarian guy.

SIDNER: You are -- you so not that. Nice try.

ENTEN: I try.

SIDNER: That was contrarian on my part.

ENTEN: Ah.

SIDNER: Ah-ha.

All right, Kate.

BOLDUAN: Ah-ha.

SIDNER: Ah-ha.

BOLDUAN: All right. Ah-ha-ha.

Feast your eyes on the carbs around me. Breaking bread? Yes, please. We -- you love that.

In this week's episode of CNN's original series "Tony Shalhoub Breaking Bread," Tony takes us to Sao Paulo, Brazil. Here's a preview.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Need a bit salt. Cut.

TONY SHALHOUB, HOST, "TONY SHALHOUB BREAKING BREAD": Why do you want to cut away the crust?

UNIDENTIFIED MALE: Because the Japanese style.

And look, it's raw inside.

SHALHOUB: Oh. UNIDENTIFIED MALE: (INAUDIBLE).

SHALHOUB: Oh, look at how beautiful the --

UNIDENTIFIED MALE: Yes.

SHALHOUB: The presentation is.

UNIDENTIFIED MALE: Look at this.

UNIDENTIFIED MALE: Let's try.

UNIDENTIFIED MALE: It's crazy, huh.

SHALHOUB: There is so much going on in there. Sort of crunchy and soft.

UNIDENTIFIED MALE: Yes.

SHALHOUB: And spicy.

UNIDENTIFIED MALE: And the spicy.

SHALHOUB: Spicy and sweet. And I don't know whether to laugh or cry. Honestly, this is amazing.

UNIDENTIFIED MALE: He is crying.

SHALHOUB: I cry at everything.

UNIDENTIFIED MALE: All right. Thank you.

(END VIDEO CLIP)

BOLDUAN: He really -- he really is honestly one of the nicest people on the planet. He's so fun. "Tony Shalhoub Breaking Bread" this Sunday at 9:00 p.m. Eastern and Pacific only on CNN.

Sara

SIDNER: We have got to try that bread. It makes you cry it's so good. Like, I --

BOLDUAN: I know, crying bread. Sign me up.

SIDNER: I -- I want it. Exactly.

All right, still ahead, a man narrowly escapes a runaway boulder. You got to see this. We'll show you the heart-stopping video in just a bit.

And shell yeah. Millions of red crabs making their way across Christmas Island. Look at those Christmas colors they're creating. This is happening there in Australia. We'll talk more about that coming up.

(COMMERCIAL BREAK)

[08:52:40]

SIDNER: Just hours from now, President Trump will leave for a high stakes trip to Asia, where he will come face to face with Chinese President Xi Jinping for the first time since Trump's second term began and since the trade war he started. And he's now threatening to raise tariffs on Chinese exports from 30 percent to 130 percent by November 1st. And if that happens, China has vowed to retaliate.

CNN's national security analyst Beth Sanner joining me now.

Look, you make the point that sometimes we can sound hyperbolic when we say there's a lot at stake, but this time, how do you see it?

BETH SANNER, CNN NATIONAL SECURITY ANALYST: Yes, there is a lot at stake here. And it's about this huge relationship we have with China that is definitely at a nadir. You know, we are not in a great place and there's some big demands on the table. But, you know, really big picture this, you know, this is about the two biggest economies, the two most powerful nations in the world. And it's about everything that relates to that, which country, you know, for our children and our grandchildren is going to be the dominant power, the dominant political system, the place where all the ideas come from. Is it going to be the authoritarian China? Is it going to be the U.S. and the west?

So, you know, really big picture, there's a lot at stake. But here we're going to have a couple hour meeting with -- with President Xi. And, you know, I don't think we're going to be able to solve all of that.

SIDNER: Who's going to walk in with more leverage here when you've got this lingering potential, you know, tariffs of 130 percent, which are supposed to take to effect a couple of days after the leaders meet.

SANNER: Well, even President Trump has said that such a level is not sustainable. So, you know, which kind of undercuts the whole idea. You know, we started at 145, which was, you know, absolutely not sustainable. So, you know, look, I -- both sides have leverage and both sides have a lot of confidence in that leverage. But, honestly, I think one of the issues here is that President Trump may have not been well advised at the beginning of all of this. And in thinking that China was the kind of 2018 when we had enormous leverage.

Now, really, I wouldn't say the tables are completely flipped, but China has enormous leverage over us.

[08:55:02]

And they're showing that by literally doing the same thing to us that -- that we've been doing to them on high end chips, but with rare earths, with magnets. And they have a lot more in that supply chain as the dominant global manufacturing power in the world that they could apply. And so, you know, I do think that we're -- we're kind of at loggerheads here, particularly over the rare earths, which is a definite choke point for us and will take years to solve.

SIDNER: Are you seeing sort of that -- that President Xi is looking at this as, look, he's waffled on other things before, so there isn't as much fear on the -- on the part of China that, you know, that Trump will actually go through with something like 130 percent tariff?

SANNER: Well, I mean, I think it is that and that they know that we can't sustain that. President Trump has reinforced that, as I said. So, I do think that they think that, you know, the Chinese might think that that's kind of a bluff. But I think more importantly here is that China is very confident in what they have as tools to apply against us. Since 2018 they've been building self-sufficiency. They've been building stockpiles, and they've been preparing for this moment. And they are now playing hardball with us. And they're also playing hard to get.

SIDNER: Beth Sanner, thank you so much. Great analysis. Everybody will be watching to see what happens in this meeting, because there is, as you say, a lot at stake.

Kate.

BOLDUAN: All right, so, a terrifying close call caught on camera in Turkey.

(VIDEO CLIP)

BOLDUAN: You see there is a quick moving cab driver narrowly escaping a giant boulder that comes crashing onto the road. A landslide had triggered the massive rock to go hurtling down the hill. Thankfully, everyone is OK.

And crabs everywhere. New video showing a great migration. Millions of red crabs migrating to the sea on Australia's Christmas Island. It happens every year as the crabs make their way from the forest to the ocean to do, of course, breed. Oh my God, look at that. That's so cool. They cross the roads, the streams, the beaches. They'll climb over anything in order to get to mating season. It's also a major tourist attraction for the island. That would be so cool to see. But I don't know how -- where do you do -- where do you stand? Where do you stand to watch this great migration and not be in their way? That's all I care about.

SIDNER: I -- they'll go around, I feel like. I feel like if you stood in the middle, they'd just be like, OK, there's some lady here.

BOLDUAN: That is totally what you'd do. You'd be like, hey, guys, watch this.

SIDNER: But I am -- yes, I'm like, I'm feeling crabby. What's up guys?

BOLDUAN: Oh.

SIDNER: Sorry.

BOLDUAN: Yes, you did it. Yes, you did it. SIDNER: All right, thank you, Kate.

Now, the head of A.I. at Microsoft says they've built a chatbot that you can trust your children to use. Their A.I. chatbot Copilot won't flirt with you, they say they won't role play and definitely won't cross the line into adult content. All of this comes as some of Microsoft's competitors are facing backlash over their A.I. chatbots and lawsuits claiming that the chatbots are harming children.

CNN tech reporter Clare Duffy has the story.

CLARE DUFFY, CNN TECH REPORTER: Yes, it's interesting that safe for all ages is a marketing pitch now for a tech platform, but Microsoft is hoping that's going to be a differentiator for its A.I. chatbot Copilot, that building it to be friendly and helpful and safe for kids without needing a special teen mode or parental controls will help as it tries to compete with the likes of Meta and OpenAI.

And right now Microsoft's Copilot is much smaller than those other players. It has about 100 million monthly active users, to ChatGPT's 800 million. But Microsoft is hoping this strategy is going to help it reach a wider user base.

And this, of course, comes as we've seen many A.I. companies moving into this space of allowing more romantic or sexual conversations, and at the same time having to try to figure out how to block kids from those adult conversations. We've seen Meta, OpenAI, character.ai rolling out these teen content restrictions, parental controls, A.I. age estimation features to try to catch young users who are lying about their age on the platform.

And OpenAI CEO Sam Altman even went so far as to say that starting in December the company will allow adult ChatGPT users to discuss erotica because they have these new restrictions for young people.

But Microsoft's A.I. CEO, Mustafa Suleyman, told me that his company is drawing a bright red line at romantic or sexual conversations. He said that's just not what they're trying to build. He told me, "I want to make an A.I. that you trust your kids to use, and that means it needs to be boundaried and safe."

And Microsoft is also pushing to get Copilot to help its users connect to the other humans in their lives, and not just sort of stay in this A.I. bubble.

[09:00:05]

And part of the way they're doing that is they're rolling out this new group chat feature where.