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Todd Blanche Confirmation in Danger?; Fed Set to Announce Interest Rate Decision; Fauci Under Fire. Aired 1-1:30p ET

Aired July 29, 2026 - 13:00   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: Fauci under fire. We're following what has been a tense hearing on Capitol Hill, as the leading infectious disease specialist during the COVID pandemic goes head to head with his main critic.

From pausing hostilities to promising retribution. President Trump says Iran is, in his words, going to get a beating after strikes targeting U.S. forces in the Middle East. We will have the latest.

BORIS SANCHEZ, CNN HOST: Plus, just minutes from now, the Federal Reserve is set to make a critical decision. Will they buck President Trump and raise interest rates to try and beat back stubbornly high inflation, a decision with major consequences for all of us?

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

KEILAR: We have breaking news on Capitol Hill, Dr. Anthony Fauci repeatedly pleading the Fifth Amendment, refusing to answer every single question, by our count, more than 100, that were asked at a Republican-led hearing on his response during the COVID pandemic and about his knowledge about how it happened.

In his opening statement, Fauci accusing Senator Rand Paul of having an unhinged obsession, that was his words, with him, just moments before invoking for the first time his Fifth Amendment right to not incriminate himself.

(BEGIN VIDEO CLIP)

DR. ANTHONY FAUCI, FORMER CHIEF MEDICAL ADVISER TO PRESIDENT BIDEN: The sole reason he is calling me before this committee is to get me to say something, anything that could vindicate his repeated public pledges that I end up, in his words -- quote -- "behind bars" -- unquote.

(END VIDEO CLIP)

KEILAR: Today's hearing is the latest in a yearslong battle between Fauci and his critics, including President Trump.

But, this morning, Fauci, who spent decades as the nation's top infectious disease expert, faced a new level of personal attacks after Senator Paul released Fauci's personal diary. Several Republicans say Fauci's entries prove unfounded claims about the virus' origins and more.

Fauci, who has faced multiple death threats, along with his family, says his diary was only made public to further embarrass and intimidate him.

CNN's Lauren Fox is live on Capitol Hill with more.

Lauren, certainly, Senator Paul may feel different that it serves a different kind of purpose, but give us the latest of what is playing out there on the Hill.

LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Yes, certainly, I think if you are a Democrat and you had a view of Fauci that he was a dedicated public servant, that was likely your view as he left the hearing today and after he pled the Fifth multiple times during that hearing.

If you are a Republican and you believe that Dr. Fauci had something to hide, that was the case that Republicans said was made today when Dr. Fauci pleaded the Fifth again more than 100 times. Clearly, there was nothing that came out of this hearing that was new information, given the fact that Fauci didn't answer any of their questions.

But underscoring all of this is the political reality that the pandemic still badly divides this country, that Senator Rand Paul still is seeking answers, Senator Ron Johnson is also seeking answers when it comes to vaccine efficacy, and that this is not an issue that Republicans are letting go, in part because the conservative base is fully behind them in doing so.

We saw earlier today that Senator Rand Paul says there will be repercussions for Fauci's decision to plead the Fifth repeatedly today. He also made clear that next week this committee will vote to hold Fauci in contempt of Congress, which obviously has a long way to go, but potentially could be one area where you could see the chairman, Senator Rand Paul, pushing for there to be some kind of criminal piece of this for Dr. Fauci.

Now, I do want to point out that this is just one example of how Dr. Fauci was handling these really tough questions from Republicans. Take a listen.

(BEGIN VIDEO CLIP)

SEN. JOSH HAWLEY (R-MO): What day of the week is it today?

FAUCI: On the advice of counsel, I respectfully decline to answer based upon my rights under the Fifth Amendment to the Constitution.

HAWLEY: What color tie are you wearing? [13:05:03]

FAUCI: On the advice of counsel, I respectfully decline to answer based upon my rights under the Fifth Amendment to the Constitution.

HAWLEY: What color is the carpet in front of you?

FAUCI: On the advice of counsel, I respectfully decline to answer based upon my rights under the Fifth Amendment to the Constitution.

HAWLEY: Let's just get one thing straight. You don't have any rights under the Fifth Amendment because you have been pardoned.

(END VIDEO CLIP)

FOX: And that was also the crux of some of the Republican members' point today. They were arguing that Dr. Fauci shouldn't be pleading the Fifth at all because he was pardoned during the Biden administration on the final day of Biden's presidency.

But one of the arguments that I heard from Democrats was essentially there was concern that if anything that Fauci said today in this hearing was perceived by Senator Paul or others as being not 100 percent true or having any gray area, that that potentially could be used against him.

So that was one of the reasons why Dr. Fauci argued today that he needed to continue to plead the Fifth. He also pointed out, and I should point it out too, that as a public servant over decades, he testified before Congress more than 200 times and was willing to answer questions -- Brianna.

KEILAR: All right, Lauren Fox, live for us on the Hill, thank you -- Boris.

SANCHEZ: Let's discuss with Josh Rogin. He's the lead global security analyst for Washington Post Intelligence, also the author of "Chaos Under Heaven: Trump, Xi, and the Battle for the Twenty-First Century," which delves into the early COVID response.

Josh, thanks for being with us.

What do you think Senator Paul is trying to achieve here? What did you make of Dr. Fauci pleading the Fifth?

JOSH ROGIN, "THE WASHINGTON POST": Right.

Well, here we are, Boris, six years after the coronavirus outbreak, and we still don't know for sure how it started, which is kind of important, because, if we don't know how it started, we can't really know how to prevent the next one.

And for a lot of understandable reasons, that issue got completely politicized over the course of the last six years. And this hearing by Senator Rand Paul did not unpoliticize it. It didn't help in that regard. In other words, it's Kabuki. It's a show, on both sides, actually.

And this is not the first time they have done that. They had a series of hearings back in 2021 that I wrote about where they did the exact same thing. They yelled at each other and they threatened to sue each other, et cetera, et cetera. So it's a lot of heat and no light.

But the question still remains, what can we do now to make sure that we know how the outbreak started so that we can figure out how it doesn't happen again? And when it comes to Fauci, listen in any normal situation, you could say, well, if he's got nothing to hide, he should just talk, which seems like a normal thing to say, but we're not in a normal environment.

We're in an environment where the Justice Department indicted Comey for an Instagram post on the beach, OK? So he's got a pardon, but it's not a future pardon. He doesn't have immunity. If Rand Paul -- to my mind, if Rand Paul really wanted the answers, he could give him immunity. But he didn't do that.

So knowing that he could be indicted for almost anything in this era, I completely understand why he took the Fifth. It seems actually legally advisable. I'm not a lawyer, but, you know...

SANCHEZ: You point out questions about the origins of COVID. And I do want to ask you about that, because obviously the lab leak theory was brought up today, as well as questions over gain of function research.

But I wonder, other than granting Dr. Fauci immunity, is there any other way to get these answers? Do you think we will ever get them?

ROGIN: Yes. Yes.

And to Rand Paul's credit, a lot of the information his investigations have unearthed over the last six years have provided us a lot of information. I mean, it's a kind of not nice thing to subpoena the guy's diary and put it out. There's a lot of weird, like, personal stuff in there. This is a classy show.

I'm not going to get into that. But suffice to say there's a lot of stuff in there that shows that Anthony Fauci seriously considered the lab leak theory in private. But him and his friends in public always pooh-poohed it and they always talked it down. So that's a difference. That's interesting.

Now, what can we do now is really the best question.

SANCHEZ: Yes.

ROGIN: Well, we have American records that have never been searched, and there's Chinese records that have never been searched. There's a lab that took down all of its information. That information is still out there. That's in the hands of the Chinese government, that's going to be a tough thing to get.

And then there's a ton of information inside the U.S. government that we still have not seen. And that's the information that the FBI, the Department of Energy, and now more lately recently the CIA has said points to the preponderance of evidence, not proof, but more evidence than not, that the bat coronavirus outbreak in Wuhan was related to the bat coronavirus labs in Wuhan.

SANCHEZ: So talk to us about that evidence. What does it entail versus the other prevailing theory, which is that this virus came or was -- there was an outbreak from the wet market that was close to that lab?

ROGIN: Right. Right.

Well, interestingly, in Fauci's diaries, he says that he doesn't think that the market was the origin at all. We already knew that because a lot of the early cases had no link to the market, but suffice to say there's a lot of research that American researchers and Chinese researchers were doing in Wuhan on making bat coronaviruses more dangerous.

Now, you could call it gain of function. You could call it not gain of function. It doesn't matter what you call it.

SANCHEZ: Could we just stop for a second?

ROGIN: Yes, sure.

SANCHEZ: The context of why were they trying to make these viruses more dangerous?

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ROGIN: The idea was to figure out how viruses might evolve so that we can prevent them.

SANCHEZ: Prevent them.

ROGIN: But if that -- if we evolved the viruses that broke out of the lab, then we actually caused the pandemic, not prevent it, which is a tough thing to wrap your head around.

SANCHEZ: Sure.

ROGIN: Because it's government sponsored research by scientists in America and China who were trying to do the right thing. They weren't trying to start a pandemic, but they may have started a pandemic.

And the fact that this is politicized means we can't get to those answers. But at some point, those answers are still there. They don't go away.

SANCHEZ: And quickly...

ROGIN: Something happened in Wuhan. We need to figure out what it was so that we can prevent the next pandemic.

SANCHEZ: Before we go, if many of those answers or at least evidence that might guide us toward the answers are behind the wall that is Beijing, how do we get them?

ROGIN: Well, there's things we could do, and then there's things that we will do.

We could include this in our complex and difficult relationship with the Chinese as something that we want, amongst a lot of other things, like human rights or trade or soybeans, whatever. We're not doing that. And what we see from the administration of Republicans is really trying to pin this on the Democrats and Fauci, whatever their culpability might be.

So we're actually nowhere on this thing, which is the result of our political, partisan, bureaucratic intransigence. And I don't see that, unfortunately, changing any time soon.

SANCHEZ: Josh Rogin, always appreciate the perspective. Thanks for joining us.

Still plenty more news to come. Surging inflation is adding to the pressure on the Federal Reserve ahead of today's interest rate decision. We're going to preview what to expect, what it could mean for your bottom line.

Plus, the fate of Todd Blanche's nomination as attorney general now up in the air after a pivotal meeting is called off. He is now on Capitol Hill, where we will take you for a live update.

And, later, a spearfish diver recounting a terrifying shark attack he captured on camera, some incredible video coming up on CNN NEWS CENTRAL.

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SANCHEZ: In just moments, the Federal Reserve will announce its decision on interest rates. So will they cut them, raise them, or leave them untouched, as the Fed has done throughout the year?

KEILAR: This is a pivotal decision, part of steering the U.S. economy through sharply higher inflation pressures and uncertainty about the war with Iran.

We're joined now by the director of economic policy at Veda Partners, Henrietta Treyz.

Henrietta, thanks for being with us.

And we're watching very closely, but it's not clear what the Fed's going to do here. And Kevin Warsh has given very few clues at this point. Do you have a prediction about how this could go?

HENRIETTA TREYZ, DIRECTOR OF ECONOMIC POLICY, VEDA PARTNERS: You're exactly right, Brianna. This is the most uncertainty we have had in a very long time about what the Fed's going to do. My expectation, based off of my conversations with very seasoned

economists and my own analysis of Chair Warsh's commentary is that we will not see an interest rate hike right now. If we do, it'll be the first time since the 1990s that the Fed has hiked rates and catch the stock market unawares.

That is a recipe for pretty dramatic change, and I don't think that that's what Warsh has signaled to us. Even though he wants to sort of make uncertainty great again, he doesn't want to step outside the bounds of what the stock market is prepared to handle, particularly in such a volatile environment.

SANCHEZ: To that point about a volatile environment, how should the Fed consider these energy fluctuations caused by the war with Iran, the closure of the Strait of Hormuz? Is the ongoing war a factor that they could ultimately control for?

TREYZ: That's exactly the problem. It's a huge factor, and it's critical for every American, for the entire consumer base.

It's not just what is Brent crude or WTI crew doing today, even though it's back up to $90 a barrel. It's how is this impacting diesel, which will trickle through to the price of food, the cost of anything you buy at Amazon, shipping a package over the Postal Service.

These are things that are very important to the U.S. economy and completely outside the bounds of anything that the Federal Reserve as a whole can control. That's up to President Trump. It's up to Iran. It's up to Saudi Arabia and nations that the Fed cannot influence in any possible way. They just have to accommodate it.

The thing that's I struggle with is that we are going into a situation where, for the next five weeks, Congress is going to be out of session. So they can't do anything to either rein in the president's powers or to, say, pass a gas tax holiday to help U.S. consumers offset these higher energy costs.

This is a completely intractable situation for a Federal Reserve chairman. Warsh, he can't control the energy prices, and he can't influence economic policy and banking policy to fix for it.

KEILAR: There's also the A.I. issue, Henrietta. And Fed officials are debating how the rapid adoption of A.I. could impact inflation. They're really watching to see how big tech's massive spending on A.I. data centers is a factor here.

What are they looking for?

TREYZ: Yes, Brianna, that's an interesting situation, because the jobs data keeps coming in pretty strong. The worst, calamitous expectations and forecasts for A.I. have not come to fruition, and the jobs market is holding up pretty well.

So, if we have inflationary prices across everything from sneakers to athletic wear, back-to-school stuff for your kids, all that stuff is increasing 5, 6 percent, even more, and it fluctuates throughout the year, in part because, as Boris mentioned, of energy prices, the A.I. component and the jobs component is not a major problem for the Federal Reserve right now.

We're going to want to hear what they have to say. And that actually brings up an important point, which is, Kevin Warsh's commentary today is going to be really critical, but it's going to be what the other governors say afterwards that's going to provide a lot of clarity for the market around issues like this, around whether or not there are particularly large amount of dissents.

That's going to be something that the entire Street watches, probably more so than even what Kevin Warsh says.

SANCHEZ: It's really interesting you say that, Henrietta.

Because, when President Trump was asked about what he would like to see Chairman Warsh do, I think, two days ago, he said that he thinks that Warsh wants to do the right thing, but he has to contend with the rest of the Fed Board, I think insinuating that perhaps Warsh is more inclined to lower rates, the way that Jerome Powell, his predecessor, was not, the way that President Trump pressured Powell to.

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How are you going to read that dynamic and whether Warsh is aligned with the president on this?

TREYZ: Yes, I was actually just speaking with one of my clients, a really esteemed guy that I trust implicitly, and he suggested that the biggest battle is not the decision about whether to raise heights or not. He agrees that they will not.

It's whether the family feud at the Federal Reserve spills out into the open. We're going to see a number of dissents, perhaps as many as eight or nine dissents, no matter what direction Warsh chooses to go today. And so that open fight and the forward guidance or the media response that those other governors are going to give to the public and to the market are really going to be as, if not more impactful than whatever Warsh says today.

SANCHEZ: We will be watching closely. It's coming in just about 39 minutes or so.

Henrietta Treyz, thank you so much for walking us through that.

KEILAR: Who's counting?

SANCHEZ: Who's counting? Yes.

(LAUGHTER)

TREYZ: Thanks for having me.

SANCHEZ: It's not like we are, right?

Of course. So we're tracking water rescues and the impact across the Northeast,

as millions face flooding threats. We have got your latest forecast just ahead.

KEILAR: And a dangerous close call for two commercial jets, triggering anti-collision alarms in both cockpits. We will have that story coming up on CNN NEWS CENTRAL.

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KEILAR: Time's running out for acting Attorney General Todd Blanche and for the Trump administration to save his nomination. Republican Senator John Cornyn has given the Justice Department just a few more hours to formally withdraw not only its proposed $1.8 billion anti- weaponization fund, but also to rewrite settlement terms that would shield President Trump and his family from tax audits.

Cornyn does not want that, and he says that if the changes are not put in writing, he will vote no when the Senate Judiciary Committee takes up Blanche's nomination, which is scheduled to happen tomorrow morning.

CNN's Manu Raju is on the Hill for us.

And, Manu, you spoke with Cornyn earlier today. Tell us what he told you.

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Well, he's not happy, because the Justice Department has not responded to his concerns, which he's been laying out for the last several weeks in the aftermath of Todd Blanche's confirmation hearing, in which Cornyn simply was not satisfied that that $1.8 billion weaponization fund is dead once and for all.

He wants language written in that actually could agree to ensure that this would not move ahead in any such way. Republicans and Democrats alike have slammed that $1.8 billion fund, in large part because it could go to people who claim they have been victimized by the Justice Department, like January 6 rioters.

And both he and Senator Thom Tillis, another Republican on that committee, both want this officially dead once and for all. And Cornyn decided not to have this meeting today because Blanche did not provide a written proposal to his satisfaction.

(BEGIN VIDEO CLIP)

SEN. JOHN CORNYN (R-TX): We have made clear from the outset that we expected some written proposals to modify the release that was signed in the tax dispute with President Trump and his -- and his organization.

It's clear President Trump was wronged. Obviously, the guy who leaked the information is now in prison for violating the law. But the scope of the release is really the problem. For some reason, I don't know whether it's the staff of the DOJ or who it is, but they simply -- they know what they need to do, but they simply refuse to do it.

RAJU: So are you a no? Are you a no tomorrow if this comes to a vote?

CORNYN: Well, Senator Grassley tells me that we need to know by 4:00 this afternoon whether the markup is still on. So we have still got a little time, and hopefully they now recognize the seriousness of this and will be responsive.

RAJU: But if it stands as it is now, if it stands as if it now, if it stands as it is now, right now, would you vote no?

CORNYN: Well, I'm not prepared to vote yes. Let me let me put it that way.

(END VIDEO CLIP)

RAJU: And that last comment so significant because any one Republican defection on this very narrowly divided committee would be enough to essentially kill this nomination, because it would be deadlocked in this committee as they head into a more-than-monthlong August recess at the end of next week, which is why tomorrow's vote so critical.

The chairman of the committee, Chuck Grassley, has not said one way or the other if he would in fact delay that committee vote, which is why that 4:00 p.m. deadline is important for the Justice Department to meet John Cornyn's demands.

And Cornyn is one, of course, who is really free from political pressure. He lost his primary bid to a Trump-backed primary challenger earlier this year and has come back and has been a thorn in the side at times to this president. So we will see if he decides to fall in line or he gets his demands met or if he decides to dig in and effectively derail this critical nomination -- Brianna.

KEILAR: Yes, he's out of the Senate here soon, but does he want to be persona non grata in the Republican Party, it might come down to.

But it's really interesting here, Manu, because, as we went through this confirmation process, we found out that, yes, Blanche was saying this fund was dead. I think there were some concerns about could it be revived, could it be the zombie fund? But this IRS sweetheart deal, right, that still stood.

And it sounds like this comes down to, is Trump willing to give that up in order to get his pick for attorney general? I mean, is that really what this comes down to?

RAJU: It very well could.

Look, I was -- we were pressing John Cornyn about whether or not, in fact, he believes Trump is the reason why the Justice Department has not gone further to meet his demands. He could not say one way or the other if Trump was behind it.

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