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New Fed Chair Speaks After Overseeing First Interest Rate Decision; Luigi Mangione Will Argue Psychiatric Defense in State Murder Trial; First Named Storm of Hurricane Season Forms Off Texas Coast. Aired 2:30-3p ET

Aired June 17, 2026 - 14:30   ET

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

[14:30:00]

BORIS SANCHEZ, CNN HOST: ... promise regime change at the organization. Let's listen.

KEVIN WARSH, FEDERAL RESERVE CHAIRMAN: Fellow FOMC members, for a lot of new ideas, new thinking and genuine interest in moving the Fed forward.

This week's FOMC meeting exemplified the very best of the Fed's traditions. Rigorous debate, open mindedness, commitment to mission, responsibility and accountability for performance. In this business, they all add up to one thing, getting monetary policy right.

Or as near to it as we can do. That is our North Star. My colleagues and I are here to serve our legislative remit, which you've heard us say before, price stability and maximum employment.

And these objectives guided our business in the meeting just concluded. As you saw a few moments ago, the committee decided to maintain the target range for the Fed funds rate at 3.5 to 3.75 percent in support of the Fed's dual mandate. The committee also reaffirmed its policy of maintaining ample reserves in the banking system.

Economic activity is expanding at a solid pace, despite elevated uncertainty that owes in part to the conflict in the Middle East. Productivity growth and capital investment, both strong. Job gains have kept pace with the workforce and the unemployment rate has changed little.

We recognize that inflation has been running well ahead of the Fed's long stated inflation goal of two percent. That's been going on for more than five years. Persistently high prices are a burden for the American people.

But the recent past need not be prologue. I am pleased to report that members of the FOMC are unambiguous and unanimous. This committee will deliver price stability.

At any institution, a change in leadership is a natural and timely opportunity. To reaffirm its mission, to review current practices and to consider whether those practices best meet our objectives. My Fed colleagues and I will be working in close collaboration to ask what changes might improve the conduct of monetary policy.

On that score, you might have already noticed something, a difference in today's policy statement. It's a bit shorter, a bit simpler, and it dispenses with some older language. That statement just gives you the facts as best we can judge it.

Absent also is so-called forward guidance, which we agreed was not well suited to the current policy conjuncture. This afternoon, you also received the usual summary of economic projections. It's been the practice of this committee for participants to submit these projections.

And I have encouraged my colleagues to continue to do so. I, however, have refrained from offering any projections of my own, consistent with my long-held views on the SCP, at least as currently structured. In the median projections, real GDP rises at 2.2 percent this year, 2.3 percent next year, and total PC inflation runs at 3.6 percent this year, 2.3 percent next year. The unemployment rate stands at about 4.3 percent.

[14:35:00]

The median participant judges that the appropriate federal funds rate to be at 3.8 percent at the end of this year, and 3.6 percent at the end of next. Let me turn now to a few words on a key initiative that we're announcing today.

I'm appointing a task force in each of five areas that are central to the broad conduct of monetary policy. First, Fed communications. Second, the Fed's balance sheet.

Third, our use and reliance on existing data sources. Fourth, productivity and jobs in an era of transformation. And last, the Fed's inflation frameworks.

These subjects are timely, consequential, and in my view, worthy of a fresh look. My colleagues and I discussed them with energy and purpose over the last couple of days. For each of these independent task forces, I'm enlisting some of the very best minds, both inside and outside the economics profession.

They will be supported by subject matter specialists from our superb Fed staff. And they'll have a straightforward charge. Start with first principles.

Ask hard questions. Examine current practice. Consider alternatives.

And ultimately, propose next steps for policymaker consideration. Since last summer, my colleagues discussed possible improvements in the form and function of Fed communications. This new task force will build on that effort, and I expect propose some well-considered changes, including to the SEP I mentioned a few moments ago.

The second task force, the one on balance sheet policy, will review the benefits and risks of the current ample reserves regime and the composition of the Fed's balance sheet. They will assess alternative frameworks for the conduct and operation of monetary policy. The third task force, the one on data, will evaluate new information sources ...

SANCHEZ: We've been listening to the new chairman of the Federal Reserve, Kevin Warsh, as he speaks, following a decision announced by the Fed to keep interest rates steady. Warsh announcing some change coming to the institution, saying that a change in leadership is a natural and timely opportunity to review current practices and find out if those practices meet their objectives. It's notable that he is replacing Jerome Powell, the outgoing Fed chair who's still serving on the Fed's board of governors.

We should note there are changes to the actual report put out by the Fed. Warsh saying that it's a bit shorter, a bit simpler, dispensing with some old language. It gives just facts as best as we can judge them absent forward guidance.

Also, he's announcing some new independent task forces in five different areas.

BRIANNA KEILAR, CNN HOST: Yes, that's right. And he's saying that that is going to be in communications. The Fed balance sheet, use and reliance of existing data sources, productivity and jobs in the era of transformation and the Fed's inflation frameworks.

He says they're bringing in outside experts and that's going to be supported by staff inside of the Fed. It'll be really interesting to see exactly what this is going to accomplish, if this is going to change, if what we're really going to see is sort of a transformation of the Fed. But he's certainly signaling in some subtle words that he is looking to overhaul how things are done there.

We're going to keep an eye on this as the Fed chair is speaking, as the central bank has decided that it is going to hold rates steady. We'll be right back with more information.

[14:40:00]

(COMMERCIAL BREAK)

SANCHEZ: So we now know how Luigi Mangione's attorneys plan to defend him when he goes on trial for state murder charges this fall. During a hearing today, it was revealed the accuser will not deny gunning down -- rather, the accused killer will not deny gunning down UnitedHealthcare CEO Brian Thompson. He instead will argue that he suffered a mental health episode while committing the attack.

Since the December 2024 killing, Mangione has gained a worldwide following after allegedly expressing animosity toward the health care industry. CNN's Kara Scannell attended Mangione's hearing today and joins us now live. So, Kara, walk us through what happened.

KARA SCANNELL, CNN CORRESPONDENT: Boris, this was a huge development in this case. Mangione's lawyers are saying that he is going to use what is known as an extreme emotional disturbance defense. That is where he will admit to having killed UnitedHealthcare CEO Brian Thompson, but say he essentially snapped and had a mental break.

And that is what led to the murder. So this is a big development in this case. We're three months from the trial.

And what it will allow the prosecution to do is to try to convince the jury to convict Mangione of manslaughter and not murder, which would significantly cut down his jail time if the jury agreed with them. If he was convicted of murder, he would face a maximum sentence of 25 years to life. He's 28 years old.

If he is convicted of manslaughter, that would be a maximum sentence of 25 years. So this is part of the strategy. It has been under seal for months.

And today was the day that they had to tell the prosecution that they were moving forward with it. The judge revealed that from the bench and it drew some frustration from the prosecutor because there are just a few weeks before this trial. And the prosecutor arguing that they don't have the information they need.

They don't even know who the defense's expert is going to be.

[14:45:00]

And they don't have the medical records so they can put on a counter to that so they can challenge that defense, because they will also be allowed and have their psychologists interview Mangione in jail to try to counter that he did not have this kind of extreme emotional disturbance. It is a high bar.

We've spoken to a number of defense lawyers and forensic psychologists that say given the strength of the government's evidence in this case, they have the firearm that was found in Mangione's backpack with shell casings that tie it to the crime scene. They also have his writings in which he expressed animosity toward the health care industry and said he wanted to whack the CEO. So forensic psychologists and defense lawyers say that this really is his best bet.

But it is a high bar, given that there is evidence of premeditation, according to them, based on his writings. The judge, though, telling the defense they needed to speed things up and they have until tomorrow to complies, telling them that prosecutors "... need to know what the malady is that this defendant suffers and how that triggered an extreme emotional disturbance at the time and place of the occurrence. Nothing is going to be a surprise. I'm not going to let you surprise the people on the eve of the trial. So get it done."

They are next back in court in early August for the one of the final pretrial hearings before jury selection begins on September 8th -- Boris.

SANCHEZ: Kara Scannell thank you so much for the update on that case.

So we have our first name tropical storm of the season. It is threatening to bring dangerous flooding to the Gulf Coast. We'll show you the path of the storm when we come back.

[14:50:00]

(COMMERCIAL BREAK)

KEILAR: The first named storm of the hurricane season is here. We're talking about Tropical Storm Arthur, and it is threatening several Gulf states with severe flooding and a separate system is targeting the Midwest with more threats of dangerous tornadoes, large hail and powerful winds.

CNN meteorologist Derek Van Dam is tracking both of these systems. Not good systems here, Derek. What do the models say?

DEREK VAN DAM, CNN METEOROLOGIST: No, just what you said. We've got our first named tropical system of the 2026 Atlantic hurricane season, but undoubtedly the story that will be told about Arthur will be this. This is the flooding that is ongoing across portions of Texas and into the Gulf states.

This will be the major impacts from this tropical storm, which now officially has a name. It is Arthur 45 mile per hour winds. Let me show you why this storm is such a menace in terms of the rain.

The center of the circulation is hugging the coastline of Texas, but it's kind of a sheared environment. So that means that it's pushing the bulk of the convection of the thunderstorm activity well to the east of the center. So what it's going to do is it's going to draw all that moisture up as it moves that center of circulation further inland in the hours to come.

So the bulk of the rain will be felt across much of Louisiana into Mississippi, eventually into Alabama and Southwestern Georgia. Here's a look at the radar and you can see there's just not a lot of rain right along the Texas coastline as it stands. The bulk of it right there, but it's about to make a landfall, or I should say move on to shore as that bulk of the precipitation kind of streams in from the Gulf.

So we do have our flood watches in place and the rainfall totals here are astronomical. I mean, we're talking about over six inches of rain in some locations. That's a half a foot through the early parts of the weekend that will certainly cause more localized flash flooding.

And we are going to pay very close attention to rapid rises in rivers and of course the urban flooding there. So let's talk about the other main weather story. This is the potential for a severe weather outbreak that is going to unfold here in the coming hours.

This area in particular across central Illinois, throughout central Indiana, Indianapolis to Peoria, southward to Springfield, St. Louis to Kansas City. That's the area we're honing in on for the potential of intense tornadoes, hurricane force gusts, and even hailstones two and a half inches in diameter. That's significant.

That's like a baseball falling from the sky. This is the radar. We had significant amounts of precipitation move through Illinois today, including Chicago.

I think you're basically on the safe side. You're cool right now. In fact, temperatures in the fifties across the windy city.

It's this area that's got a different air mass to work with and a much different dynamics to work with. That's why we're seeing tornado watches being extended, severe thunderstorm watches to the north across Minnesota. So taking you forward in time through this evening, look at the timestamp at the top here.

This is central time. So 5:00 p.m., right around dinnertime, heading home from work. This is when you need to be weather aware across those areas I just mentioned.

It's because a cold front will move through. It'll help fire up the thunderstorms. We get the daytime heating from the sun.

Once that initial batch of precipitation moves in and that's when it's go time. So we're going to keep close eye on those severe storms and the potential for very powerful tornadoes throughout central Illinois and into Indiana as well. So Indianapolis, if you're listening, now is the time to prepare -- Brianna.

KEILAR: All right. Heed that advice for sure. Derek Van Dam, thank you so much.

We are now getting a sense from these 14 points of agreement in the Memorandum of Understanding between the Iran and the U.S. what they have agreed on. It had been some days, but now we are seeing it, including the money that Iran is set to get immediately and hundreds of billion dollars for reconstruction over the course of this agreement. We'll have more on those details after a break.

[14:55:00]

(COMMERCIAL BREAK)

SANCHEZ: This weekend, Craig Ferguson is once again exploring the American dream, discussing it with another former late night host, Jay Leno. Here's a preview.

(BEGIN VIDEOTAPE)

CRAIG FERGUSON, HOST, CRAIG FERGUSON, AMERICAN ON PURPOSE: One of the major things that drew me to America was the automobile. You'd see movies and people driving cars like this out of the cave.

JAY LENO, TELEVISION HOST, COMEDIAN, AND WRITER: Through the outhouse door.

FERGUSON: Through the outhouse door. That American idea, being an individual, is a complete negation of the class system that I grew up in and the wrong end of it as well.

So you ditch the class system, you ditch the idea that you're born this way and you're born to the service and you'll get to be a housemaid one day. It's like, no, you got fins. Ostentatious success was the way to put forward your individuality.

You've made it, you've got the American dream.

LENO: Right, of course.

FERGUSON: And an individual ...

END