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U.S. Inflation Rises To Three Percent, Highest Since January; Trump Set To Hold High-Stakes Meeting With Chinese President Xi; Trump Ends Trade Negotiations With Canada Over Tariff Ad; NY AG James Pleads Not Guilty To Charges Urged By Trump; Cuomo Invokes Fears Of Mamdani's Muslim Faith In Final Days Of NYC Mayoral Race; Eric Adams Endorses Cuomo In NYC Mayoral Race. Aired 3-3:30p ET

Aired October 24, 2025 - 15:00   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 HOST: Prices tick up, new data shows the Fed fight against inflation isn't over, investors seeing a reason to celebrate the new numbers and what they could mean for interest rates.

And no payday, hundreds of thousands of federal employees go without their first full paycheck as Congress is not any closer to an agreement to reopen the federal government.

And does America have a gambling problem? Why the betting ring that the FBI busted may be a symptom of a much bigger issue for some sports fans.

We're following these major developing stories and many more all coming in right here to CNN NEWS CENTRAL.

OMAR JIMENEZ, CNN HOST: Let's start with some new economic data raising concerns about the surging costs of just about everything. Today, the Bureau of Labor Statistics announced that the annual U.S. inflation rate hit its highest level since January, now at 3 percent, and families are feeling it. Moody's Analytics says that equates to the typical American family spending over $200 more per month than they did a year ago. CNN's Matt Egan joins us now to take a look at all this.

So, Matt, can you just tell us what does this report mean, what do you see in it?

MATT EGAN, CNN SENIOR REPORTER: Well, Omar, the President has said that inflation has been defeated. These numbers say otherwise. Prices are still going up uncomfortably fast. And that is making the cost of living worse.

The good news is that consumer prices only went up by 0.3 percent month over month, that was a step in the right direction and better than expected. However, the annual inflation rate, as you mentioned, did go up to 3 percent. That's the highest since January. And when you look at the trend for annual inflation going back for the

past year, what stands out to me is inflation today is significantly higher than it was last September back when candidate Trump was on the campaign trail saying that inflation was out of control. It's also significantly higher than it was back in April when it bottomed out at 2.3 percent. Of course, that's when many of the President's tariffs kicked in.

Now, as far as what's getting more expensive, one of the big drivers in this inflation report was the fact that gasoline prices, while they remained low, they did move higher during the month of September. That's something we have to keep an eye on. But this is not just about gas prices, because we did see some goods that are exposed to tariffs get more expensive, including footwear, men's and boys' apparel, and watches. And then, also at the grocery store, lunch meat going up by more than 4 percent. That's the highest on records that go back to 2010. And bad news for doughnut lovers, they increased by almost 6 percent, that's the most since 1999. Omar.

JIMENEZ: And again, I said it before, I'll say it again, it's probably a good thing, Matt, for me personally that doughnuts are a little higher, for me just going to the gym and whatever, but again, that is just me. One of the things I think is different, Matt, as opposed to, let's say, April when -- when tariffs were announced that so-called liberation day, markets don't seem to be reacting right now to -- to this report that's come out. Obviously, the -- the talks between President Trump and Canada have blown up too, what are you seeing in the markets right now?

EGAN: Yes, Omar. Markets are reacting positively. We're seeing the Dow up almost 600 points, 1.2 percent on track to close above 47,000 for the first time ever. S&P and the NASDAQ significantly higher as well, also on track to close at all-time highs, and that's because the weirder than expected inflation reading seals the deal on an interest rate cut from the Federal Reserve next week. We're seeing a 97 percent chance of a cut in October, one hundred percent chance in December, and that of course is good news for investors and for people who have credit card debt and home lines -- home equity lines of credit.

But Omar, big picture, inflation, it's not as bad as it was three years ago, but it doesn't mean that this cost-of-living crisis has been solved, right? Prices are still way too high.

JIMENEZ: Yes, inflation still exists.

Matt Egan, appreciate the reporting as always. Brianna.

KEILAR: The specter of this latest economic data is likely to loom large as President Trump embarks on what could be his most high-stakes overseas trip for trade so far. Tonight, the President departs for a week-long visit to Asia. He'll meet with the leaders of several U.S. trading partners, Malaysia, Japan and South Korea.

But it's his meeting with Chinese leader Xi Jinping that many are eagerly awaiting.

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The world's two biggest economies have been locked in a trade war since the spring.

Just this month Trump threatened 100 percent tariffs on China set to begin on November first. We're joined now by the Vice President of General Economics and Trade at the Cato Institute, Scott Lincicome.

All right, Scott, first off before we talk about this trip because this could be very consequential, just tell us about the situation we're in. How precarious is this?

SCOTT LINCICOME, VP OF GENERAL ECONOMICS AND TRADE, CATO INSTITUTE: Well, it's certainly worse today than it was just a few weeks ago when things had really seemed to settle down. But then, the United States imposed some new export controls on semiconductors and other technologies. And then, China retaliated to that with new significant export controls on rare earth minerals which are used in a lot of electronics and renewable energy and autos.

And then, of course, President Trump came back and threatened a hundred percent tariff increase effective November 1st. So, you know, in a very short time things have escalated dramatically and we're hoping that the two leaders can calm things down next week.

KEILAR: What does the President need to do over the next week in Asia leading up to and during this planned meeting with Xi?

LINCICOME: Well, the first thing is just to lower the temperature on all of this because trade wars become trade wars because each side hits and hits back, and this tit-for-tat action ends up in a full- blown trade war. But the other thing is that the President has both political issues he needs to -- needs to deal with and economic ones. The political one is the soybean export situation, with the Chinese having not purchased almost any soybeans this year, and that's harming American farmers, depressing soybean prices.

But then, there are real economic issues as well. Trump needs to find a way, an off-ramp for these a hundred percent tariffs, because those could lead back to what we were seeing in the spring with a lot of investor nerves about the really trillions of dollars in trade, investment, sales and the rest that -- that could be implicated. The other thing is they've got to deal with rare earths because the Chinese export restrictions have really freaked out not just automakers in the U.S. and others, but other companies in other places like Europe. And there -- they've got to find a way to resolve that too just, again, to get things on a better track.

KEILAR: And Scott, you know, seizing kind of any moment to take things off the rails, this trip is happening as Trump blew up trade talks with Canada overnight because of this ad in Ontario that features edited video of President Reagan talking about free trade. Can the President afford to be that erratic when it comes to these kinds of decisions, and talk about the impact of pausing those trade talks?

LINCICOME: Well, I think it really underscores just how uncertain the trade policy is -- environment is right now, and how the laws at issue are really causing a big problem, because they grant the President this really broad and ambiguous tariff power and he can -- has a little tariff light switch in the Oval Office that he can flip on and off. And -- and, you know, whether it's a TV ad coming out of Canada or a political trial in Brazil, these are the types of things that the President is seizing on to potentially block or change trillions of dollars in annual trade. And that's why, I think, it really is -- it's so imperative for both Congress and the courts to get a handle on these things because you can't really have a system that is that uncertain. It's going to be brutal for investors and for anybody involved in that space.

KEILAR: Scott, it's always great to speak with you.

Scott Lincicome, thank you so much.

LINCICOME: My pleasure.

KEILAR: Still to come, New York's Attorney General Letitia James pleading not guilty to mortgage fraud charges and vowing to not be deterred by what she says is the weaponization of the justice system.

And then later, more than a month after winning an election to fill her father's congressional seat, Representative-elect Adelita Grijalva still hasn't been sworn in. Well, she's going to join us live. We'll have that and much more coming up on CNN NEWS CENTRAL.

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JIMENEZ: A trial date is now set for New York Attorney General Letitia James in her fight against President Trump's Justice Department. Earlier today, James pleaded not guilty to charges in her mortgage fraud case. Charges, she says, she -- would not have been filed if she had not prosecuted the President in New York.

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LETITIA JAMES, (D) NEW YORK ATTORNEY GENERAL: This is not about me. This is about all of us and about a justice system which has been weaponized, and a weapon against those individuals who simply did their job and who've stood up for the rule of law.

(END VIDEO CLIP)

JIMENEZ: James is seeking to get the case dismissed arguing the President's hand-picked U.S. Attorney was unlawfully appointed.

With us now is Dave Aronberg, former state attorney for Palm Beach County, Florida. We should note he worked with Attorney General Pam Bondi when she was Florida's Attorney General.

But good to see you, David. Thanks for taking the time. James' trial set for January 26th, 2026, what happens between now and then? DAVE ARONBERG, FORMER STATE ATTORNEY, PALM BEACH COUNTY: Well, you can

expect to see a motion to dismiss based on vindictive prosecution. We already saw this from James Comey and Letitia James will be no different.

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And I think it's a very valid claim, especially when you know the facts that Lindsey Halligan, the prosecutor here, was appointed for the sole purpose of prosecuting James and Comey and others. And Trump ordered his attorney general to prosecute James and Comey. And then, when the career prosecutors refused to do it, Lindsey Halligan stepped in with no prosecutorial experience and did it herself. This reeks of vindictive prosecution, I think they have a very good chance of getting this dismissed before it ever hits a jury.

JIMENEZ: And tell me a little -- little bit about that dynamic, because I was going to ask you if she has a strong case for selective prosecution here. But she's not the only person in that orbit, I guess, we'll call it of -- of the alleged Trump retribution orbit, let's call it that, that is sort of seeking and fighting back along those grounds.

ARONBERG: Correct. And John Bolton will fight back on those grounds, too. Now, the case against Bolton is stronger. The facts are tougher against him, and the prosecutors are seasoned, national security prosecutors. That's different than in the James and Comey cases, where the seasoned prosecutors refused to go along.

In fact, there was a memo written by career prosecutors saying that this case -- the Letitia James case was weak, and that's a reason why the U.S. Attorney at the time resigned or just decided not to prosecute this case. And so, Trump had to bring in a loyalist, a property attorney who has never prosecuted a case, an insurance lawyer who never prosecuted a case to deal with this. So, it reeks of vindictive prosecution.

Now, as far as Bolton, the problem for prosecutors is that when you engage in vindictive prosecution over here, it seeps into the cases over there, even though they have a much stronger case against Bolton. So, Bolton will benefit by what Trump has done to Letitia James and James Comey.

JIMENEZ: And in Letitia James' case, I mean, look, there -- there are some things that the government would -- would have to present. I mean, has the government presented any evidence to substantiate their allegations against James of bank fraud and -- and lying about her plans to -- to rent the house, what has stuck out to you so far?

ARONBERG: What stuck out to me is that from a substantive standpoint, this case is weak sauce. That's a technical legal term, Omar. So ...

JIMENEZ: I'll write it down.

ARONBERG: ... what happens is that the prosecution has -- please do-- the prosecution said that Letitia James' second home rider, this is her mortgage documents, which uses standard Fannie Mae terms, prohibits her from renting out her second home -- but that's not true. If you look at the language of the rider, it actually says that James has the right to oversee short-term rentals.

So, at best for prosecutors, the contract is vague, which means you can't get a conviction beyond a reasonable doubt by a unanimous jury. And at worst for prosecutors, that contract means it's going to be a quick acquittal.

JIMENEZ: I look forward to the term weak sauce coming up in any potential motions to dismiss.

Dave Aronberg, appreciate the time and perspective. Thanks for being here.

ARONBERG: Thanks for having me.

JIMENEZ: All right. Meanwhile, New York mayoral candidate Zohran Mamdani just defended his Islamic faith and slammed his rival, former Governor Andrew Cuomo, in an emotional speech outside a mosque. We'll bring you those details next.

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KEILAR: In the New York City mayoral race, Zohran Mamdani's politics have divided Democrats, but now his faith is in focus. On Thursday in a radio interview, his opponent, former Governor Andrew Cuomo, had this exchange with radio host Sid Rosenberg.

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ANDREW CUOMO, NYC MAYORAL CANDIDATE: People's lives are at stake. God forbid another 9/11. Can you imagine Mamdani in the seat?

SID ROSENBERG, RADIO HOST: Yes, you know, I could. He -- he'd be cheering.

CUOMO: Yes. That's another problem.

(END VIDEO CLIP)

KEILAR: Cuomo in recent days has focused more on Mamdani's faith, possibly trying to undercut him with voters who are concerned about his criticisms of Israel. Mamdani got emotional as he responded to Cuomo today.

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ZOHRAN MAMDANI, NEW YORK CITY DEMOCRATIC MAYORAL CANDIDATE: There are twelve days remaining until Election Day, I will be a Muslim man in New York City each of those twelve days, and every day that follows after that. I will not change who I am, how I eat or the faith that I am proud to call my own. But there is one thing that I will change, I will no longer look for myself in the shadows, I will find myself in the light.

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KEILAR: Let's talk about this now with Dean Obeidallah, the host of "The Dean Obeidallah Show" on SiriusXM.

Dean, I am just so curious what you think about this. This race that is pitting groups of people in New York City at really kind of a -- a vulnerable time. It's pitting them against each other. And you're listening to these two candidates, what do you think?

Dean OBEIDALLAH: Look, it's not the average person in New York pitting people against each other, it's a politician in Andrew Cuomo who is going along with anti-Muslim bigotry simply because he thinks it helps him politically. I mean, that's what this is about, Brianna. If Andrew Cuomo was a true leader, he would have stood up to the bigotry against any group, not just Muslims, if it was against Jews or Blacks or Latinos, if that person made a joke like that, he would have pushed back, he didn't because he sees a benefit to it politically.

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So, that's what we're dealing with. We're dealing with the worst type of -- of hatred and bigotry being used and weaponized for political gain, not something we're not used to as Muslims, but it is jarring in 2025 to see the level directed against Zohran Mamdani is unlike anything I've seen directed against one candidate -- certainly one candidate in New York City, never seen this before.

KEILAR: What would you have liked his response to be?

OBEIDALLAH: Andrew Cuomo's response - it -- it should have been to Sid Rosenberg. He could have even said, look, I -- I know you're joking, but there's no place for that kind of bigotry. That simple. The idea that Muslims would cheer a terrorist attack in New York is despicable. It is dangerous rhetoric. It tells people we're an other. That we're not fellow Americans when we are. Over one thousand Muslims serve in the NYPD every day, protecting the lives of New Yorkers. One of the deputy chiefs is a Muslim-American. We are proud to be part of this city. We are proud to protect this city in different capacities, proud to be elected officials, doctors, lawyers, Uber drivers. We're all part of the mosaic known as New York City.

That's what Andrew Cuomo doesn't get. It's not about politics. He's a Democrat. I'm a Democrat. He is not being a Democrat. He is being a craven politician who will use bigotry to score political points. There's no place for that in Democratic Party, and I'm glad some Democrats -- Jerrold Nadler spoke out, he's the leading Jewish elected official in New York, denounces instantly, and that's great to see, that's what Democrats need to do.

KEILAR: I want to listen to what Eric Adams had to say when he was endorsing Cuomo yesterday. Here it is.

(BEGIN VIDEO CLIP) MAYOR ERIC ADAMS (D) NEW YORK: And it is time for us as a family to

come together. New York can't be Europe, folks. I don't know what is wrong with people. You see what's playing out in other countries because of Islamic extremism, not Muslims, let's not mix this up, but those Islamic extremisms that are burning churches in Nigeria, that are destroying communities in Germany, that have taken over the logical thinking.

(END VIDEO CLIP)

KEILAR: What's your reaction?

OBEIDALLAH: That is worse than what Andrew Cuomo said. Here's the mayor of New York tying Zohran Mamdani, an American, a New York assemblyman, with extremism by terrorists in other lands. There's no connection between Zohran and that. And Eric Adams going, "I'm not talking about Muslims." Yes, you are. You know you are.

Eric Adams knows Muslims. He's the former Brooklyn Borough President. I emceed events that he organized for the Muslim community. And now, he's turned his back on our community because he wants to be in the Cuomo administration apparently. Again, Eric Adams is a fellow Democrat. This is not a right-left issue. There are bigots on the left and bigots on the right. And we need the good people in both parties to stand up and say there's no place, especially in New York City, for this type of hate.

KEILAR: Yes. And whoever is going -- you know, whoever is running for mayor, right, they're running to be a -- the mayor of the entire city in such a diverse city. When you look at Mamdani's approach, do you have any constructive criticism for how he is approaching this?

OBEIDALLAH: Except that I'd like him to come on my radio show, I have no other criticism of him. Look, he's running a campaign that's been put in an amazing position ...

KEILAR: Well, then let me -- Dean, let me -- let me rephrase this -- let me rephrase this, there are people who are concerned ...

OBEIDALLAH: Sure.

KEILAR: ... right, about him. And you have New York Congressman Dan Goldman who had said he wasn't ready to endorse Mamdani. I think that he reflects some New Yorkers who just want to make sure that Mamdani is very clear when it comes to violence as it relates to anti-Israel sentiment. What would you say to Mamdani about how he can communicate with people who have those concerns?

OBEIDALLAH: He has been from everything I've read -- meeting with Jewish leaders across New York since winning the primary. His coalition overwhelmingly was younger Jewish people. That was a big part of his coalition winning the primary. Right now, Jewish voters are split in the latest polls between Cuomo and Mamdani. It's going to be up to him to appeal to them. But he certainly made it clear there's no room for anti-Semitism in New York, just like there's no room for anti-Muslim bigotry, anti-gay hate, anti-Hispanic hatred or anti-black hate. So, that -- he's going to have an office dedicated to that, that's the most important thing.

If people disagree with his views on Israel and that's how they're going to vote in the election for mayor of New York, well, people vote for any reason they want, but everything he's done is to try to make sure -- the Jewish community knows that we are in this together. We are Muslims. We know what it's like to be a minority faith. We know what it's like to be demonized for our faith, attacked of our places of worship, attacked, we are with you a hundred percent in that fight.

KEILAR: Dean Obeidallah, great to speak with you. We hear that pitch, you're trying to get Mamdani on your show. Thank you so much for being with us.

OBEIDALLAH: I'm trying. Thanks so much.

KEILAR: All right. Thanks, Dean.

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So, it's been a month since Congresswoman-elect Adelita Grijalva won her special election in Arizona. And next, she is still waiting to be sworn in.