Return to Transcripts main page

CNN News Central

DOJ Threatens States to Report Undocumented Immigrants; ICE Agent Charged With Lying; Lindsay Clancy Jury Continues Deliberations; Billionaire Refuses to Testify in Epstein Probe; U.S. Bond Market Flashing Economic Warning Signs?; J.D. Vance to Hold White House Briefing. Aired 1-1:30p ET

Aired September 03, 2026 - 13:00   ET

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

[13:00:00]

(COMMERCIAL BREAK)

[13:00:35]

BORIS SANCHEZ, CNN HOST: Stepping up to the podium, Vice President J.D. Vance taking questions from the White House press corps, and he could be grilled on everything from Iran to inflation.

Plus, it may be the most important market that many Americans haven't heard of. We will look at bonds and why the bond market is worrying world leaders, frustrating investors, and could cause trouble for consumers.

And a sixth day of deliberations in the murder trial of Lindsay Clancy. With each passing hour, concerns are mounting about whether the nine women and three men on the jury are going to be able to reach a verdict.

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

We start this afternoon with the breaking news. We're standing by for the first White House press briefing in more than 40 days. Vice President J.D. Vance will be taking the podium to answer reporters' questions.

And there is a lot to break down today, not only on the ongoing war with Iran, but also growing pressure on Defense Secretary Pete Hegseth, the rising cost of energy and everyday items, and, of course, the midterm elections just a couple of months from now.

Let's go straight to the White House Press Briefing Room with CNN's Kaitlan Collins.

Kaitlan, what are you hearing about what the vice president plans to address?

KAITLAN COLLINS, CNN HOST: Well, Boris, they have yet to replace the press secretary, Karoline Leavitt, here at the White House after she announced that she was going to be leaving her post. And, instead, we are seeing a rotating cast of officials come out, as we have seen in previous instances when the press secretary was on maternity leave, for example.

And the vice president, J.D. Vance, is the first one up at the podium in nearly 40 days, more than that, actually, since there has been an official press briefing here in the Briefing Room. It is quite crowded for this first return back to the podium.

And you're right, there are a lot of questions ahead of the vice president as he comes out here to take these questions from reporters inside the room, including the resurgence of the Iran war, as we have seen these strikes going back and forth with the United States hitting Iran, as the president made clear yesterday he is prepared to do again should they continue to retaliate, and also Iran trying to hit U.S. allies in the region, Kuwait, Jordan, all having to intercept missile missiles in the last 48 hours or so.

And so all these are key questions, especially for the vice president, given how involved he's been in these negotiations with Iran and that memorandum of understanding that was signed earlier this summer before it fell apart, but also a lot of questions about how that war is impacting things at home.

They are just a few days away from hosting that midterm convention that President Trump wanted and will be speaking at in Dallas next week.

And so for the vice president and the president, who is last night vowing to campaign in 30, 35 places for those vulnerable Republicans who need all the help they can get ahead of November, there are real questions for the vice president as well, as the Republican midterms prospects are looming and right now looking pretty challenging based on the latest numbers that we have seen, part of that being driven by those inflation numbers that you just mentioned there.

So, a lot to ask the vice president about when he steps out to the podium in just a few moments, Boris.

SANCHEZ: Yes, we are expecting him at any minute. We will get back to you at the White House.

Kaitlan Collins, thank you so much for that.

Warning signs are flashing in the most important trading market on the planet, the U.S. bond market. Interest rates on government bonds having -- have been rising, making borrowing money more expensive, more expensive for you to get a mortgage, more expensive for businesses to borrow money, and more expensive for Washington to carry America's $40 trillion debt.

Let's discuss with Gavin Bade. He's a trade and economic policy reporter for "The Wall Street Journal."

Gavin, great to see you as always. Let's get wonky.

GAVIN BADE, TRADE AND ECONOMIC POLICY REPORTER, "THE WALL STREET JOURNAL": Sure.

SANCHEZ: Is this is really complicated. So help me understand as if I were 5 years old, what is a bond yield? Why are these rising?

BADE: Sure, I think you said it just -- you said it correctly there, Boris, is that this -- when bond yields are rising, the yields on these Treasuries are rising, it means that it is more expensive for the U.S. government to borrow money.

So, going forward, if bond yields are higher, that means the U.S. is going to spend more of its budget or more of the money that the federal government allocates to simply pay interest on the debt. And so this after -- if this keeps going for a long time and yields keep going up, it could become a pretty unsustainable situation.

And that's not just for the U.S., but we see other things like that going on around the world.

SANCHEZ: Yes, it's happening in France, in Japan, the U.K., Germany. What does the global nature of this indicate?

BADE: Yes, so there's a couple of factors that kind of unite all of these, these issues here.

[13:05:03]

One is the war in Iran, right? Fuel costs reverberate through the economy. They drive up the overall level -- the overall price level, overall inflation, and that we see will raise borrowing costs for economies over time. There's also large and persistent government deficits and debts, right?

A lot of these countries that you have just mentioned, including the U.S., have large debts. And so deficit hawks have said one day the bond markets are going to start to react to these large, persistent deficits and start to boost borrowing costs for these nations. It seems like that that is starting to happen now, maybe because there's a precipitating factor with the Iran war.

SANCHEZ: And inflation has been persistent for years at this point, higher than what the Fed would like at 2 percent. Kevin Warsh has indicated that he's going to war with inflation. What does that mean in the context of bond yields?

BADE: Well, it also means that traders are going to expect that bonds are -- that bond yields are going to increase in the future and they're going to trade like it, right?

And so Kevin Warsh is in a difficult situation, because we don't want to see our borrowing costs go up, but he also has said that he wants to hew to the Fed's 2 percent inflation target. Well, we're closer to 3 right now.

SANCHEZ: Yes.

BADE: And so that would mitigate toward him raising the overall interest rate that the Fed puts out. And that would -- that would also constrain economic activity right before the midterms. So that's kind of a catch-22 for him and the Trump administration.

SANCHEZ: Yes, not to mention it would infuriate the president, who has for a long time called for lower interest rates.

The Treasury secretary, Scott Bessent, has tried to intervene in the bond market. Have we seen any indication as to whether those steps are working?

BADE: At most, they have been working temporarily, right? We saw him, for instance, try to intervene in the Japanese -- in the Japanese market, selling some euros, buying Japanese yen, trying to prop up its currency. That worked for a while, but then we saw the rates kind of return to where they were before, right?

And so it's difficult for him because the bond market is the thing that scares everyone, right? And the -- kind of the creatures of that market are a little bit mysterious, and why it moves is a little bit mysterious to even the treasury secretary, right?

So he can do what he can on the -- in the short term, but over the long term, if you don't solve some of these systemic issues, the war and these large and persistent deficits...

SANCHEZ: Yes.

BADE: ... it's going to be difficult to really tell the bond market what to do.

SANCHEZ: I feel like there is an A.I. component to everything in the economy. How does A.I. impact this situation?

BADE: I think A.I. has been kind of a bright spot in the U.S. economy. Certainly, there's been a lot of capital expenditure going into building these data centers right now.

But we have also seen -- and we had a good article from some of my colleagues just yesterday showing how it could be crowding out investment in a lot of other things. Construction spending on A.I. data centers is way up since the start of 2025 and even before that, but construction on other facilities has really fallen off a cliff.

And so I think what you're seeing is Wall Street putting a lot of its eggs in that basket, allocating a lot of capital to build these A.I. data centers, because they think there's going to be a big return there. But that capital -- that means that that capital is not going to other places, like maybe a more durable manufacturing economy.

SANCHEZ: Yes, or housing perhaps.

BADE: Or housing, yes, absolutely.

SANCHEZ: Yes. Yes.

BADE: And mortgage rates are near 7 percent again. That's not good for a lot of new families who want to buy a house.

SANCHEZ: Great point.

Gavin Bade, great to have you, as always.

BADE: Thank you.

SANCHEZ: Thanks so much for joining us. Appreciate it.

Still plenty more news to come. We are awaiting Vice President J.D. Vance at the podium at the Press Briefing Room at the White House.

Plus, there's this: billionaire investor Leon Black refusing to appear before a deposition in front of the House committee investigating Jeffrey Epstein. Not only that. He's apparently suing that panel, and its chairman. We will explain why.

And, later, we're live in Massachusetts for the Lindsay Clancy trial. What happens if again today the jury is deadlocked?

That and much more coming your way next.

(COMMERCIAL BREAK)

[13:13:11]

SANCHEZ: We're just giving a quick check-in of the White House Press Briefing Room, where at any moment we're expecting Vice President J.D. Vance to appear and answer reporters' questions. We're going to keep an eye on that podium and get to it as soon as we see the vice president.

Meantime, on Capitol Hill, a billionaire associate of sex trafficker Jeffrey Epstein declined to show up for his deposition and is instead suing the House panel. Leon Black is trying to block the House Oversight Committee from obtaining his nondisclosure agreements and testimony. The panel issued two subpoenas to black in its Epstein investigation after the committee chair said Black refused to answer a series of questions during a voluntary interview in June.

Just to know, Black has denied any wrongdoing or knowledge of Epstein's crimes.

Let's go live at Capitol Hill with CNN's Annie Grayer.

Annie, what are lawmakers saying about this no-show?

ANNIE GRAYER, CNN SENIOR REPORTER: Well, lawmakers are frustrated that Black has defied their subpoena and refused to turn over documents. Members still filed into the room where Black was supposed to appear for his deposition to mark that moment and also to have a conversation about what comes next.

Democrats are quick to call for the committee holding Black in contempt of Congress, but that would be a process that would need to play out. And the chair of the committee, House Oversight Chair James Comer, has said that while he supports the idea of contempt, he wants to discuss with the rest of the committee members and lawyers because, now that Black has sued both the committee and Comer in his capacity as chair, there is a lot to navigate here.

This is an unprecedented step and hasn't happened in this investigation. So Comer doesn't want to rush into things too quickly. Take a listen to how he framed it to us earlier this morning.

(BEGIN VIDEO CLIP)

REP. JAMES COMER (R-KY): I mean, I think we could do contempt right now. And that's fine with me. But I -- we're going to consult with our legal team, with the House counsel. We don't want to do anything -- I don't want to walk into any trap that would somehow let him through some mistake that we make get out of having to answer questions.

(END VIDEO CLIP)

[13:15:17]

GRAYER: Now, Black's argument through his lawyers is that is that these subpoenas are invalid, and that the subpoena for the nondisclosure agreements that the committees want are too broad and could really violate personal security preferences if the committee were to get that information.

And Black is arguing that just because the committee wants these nondisclosure degrees doesn't mean that they should obtain them. The committee wants these agreements, though, because they want to see if there are any ties to Jeffrey Epstein in there.

Black, of course, says that Epstein was not involved, he had no knowledge of Epstein's crimes, and he has never sexually assaulted or abused anyone. So this fight will now play out in the days and weeks ahead, Boris.

SANCHEZ: Yes, we have a Democrat on that panel who is going to be joining us later this afternoon. You'll want to stay tuned for that.

Annie Grayer, thank you so much for that report.

Jurors are now back for a sixth day of deliberations in the Lindsay Clancy trial. The jury's been deadlocked, but the judge is urging them to keep trying to reach a verdict. Failure to do so would result in a mistrial. That's an outcome that Clancy's lawyer says he is prepared for.

(BEGIN VIDEO CLIP)

QUESTION: Some people say a second trial would favor the prosecution. What do you think about that?

KEVIN REDDINGTON, ATTORNEY FOR LINDSAY CLANCY: Bring it.

(END VIDEO CLIP) SANCHEZ: Clancy is accused of murder after strangling her three young kids in 2023. The defense is arguing that she should not be held criminally liable because she was suffering from postpartum psychosis.

CNN correspondent Jean Casarez is outside the courthouse for us.

So, Jean, as we await for any update from the jury, can you walk us through some of the sticking points?

JEAN CASAREZ, CNN CORRESPONDENT: I can, and that's a great question because that's what they have to be focused on right now, I am sure, the pivotal points.

But want to tell you that the court officials are on lunch now from 1:00 to 2:00 p.m. Eastern Standard Time, and the jury can deliberate during the lunch hour period or not. That's what they have been told. We don't know what they're doing, but that's where we are at this moment.

Now, what the jury has to be focused on is the pivotal question, did the prosecution prove beyond a reasonable doubt that Lindsay Clancy appreciated the criminality of what she did, that she knew right from wrong when she walked her children down one by one into the basement on that early evening and killed them?

That's the question. So what will they look at? First of all, that day, right, the course of events that day, taking Cora to the doctor, coming home, building a snowman with her older children, engaging them in art projects, calling for takeout very close in time, tracking the amount of time it takes her husband to get there, get to the CVS, get home, so all of that.

They may also look at, four days before this happened on the computer in the family home, there was a search: "Can you treat a sociopath?"

Now, Patrick Clancy did not say that he researched that at all, and he was asked questions about that computer. So who did? Why was it done? And then they may branch out farther because Patrick Clancy testified that, from Thanksgiving to about December 6, there were two times that his wife, Lindsay, said that she had intrusive thoughts.

And she said the thoughts were about harming the children or having harm coming to the children. So he asked her, do you have a plan that you would do? And she said, no, no, I don't. But he said it was very confusing in his testimony because she was playing with the children and loving the children at the very same time virtually that she was telling him this.

So they're going to look at the facts, along with the legal standard that they really have to come to a conclusion on.

SANCHEZ: Jean Casarez, live in Plymouth, Massachusetts, for us, thank you so much for that update.

Still to come: Two people are dead after gunfire erupts at a high- rise apartment building in Minneapolis -- ahead, what we have learned about the shooter.

Plus, the Justice Department issuing an ultimatum to states: Hand over info on undocumented immigrants or lose federal funding for key public assistance programs.

The details when we return.

(COMMERCIAL BREAK)

[13:23:58]

SANCHEZ: Breaking news into CNN.

Federal prosecutors are charging an ICE agent with lying about the events leading up to his shooting of a Venezuelan immigrant earlier this year. That's according to multiple people familiar with the matter.

CNN's Whitney Wild is following the story and joins us now.

Whitney, what are you learning?

WHITNEY WILD, CNN LAW ENFORCEMENT CORRESPONDENT: Well, Boris, this is something that we had previously reported had been under discussion.

Our understanding was that the Minnesota federal prosecutors were working with prosecutors at the Justice Department to try to figure out exactly what charges to bring. There had been some back-and-forth. What we now know, as you said, according to multiple sources, is that he has been federally charged with making false statements.

Our understanding is that the Justice Department is still considering whether to bring civil rights charges against Castro. That's according to one of the sources that we have spoken with. This story is being reported out by our colleagues Hannah Rabinowitz and Holmes Lybrand.

This is a very pivotal moment, Boris, because this marks the first time the Department of Justice is filing charges against an immigration agent for conduct that occurred on duty during these nationwide immigration surges.

[13:25:10]

Let me bring you back to January, when this all happened. According to the Hennepin County attorney's office, who has already filed charges against this ICE agent, Christian Castro, on January 14, Castro had basically won a license plate of a vehicle and determined that the registered owner of that vehicle was not a U.S. citizen.

So a chase began that lasted about 15, 20 minutes. The driver of that vehicle jumped out, ran toward the home of his cousin, a man named Jose Sosa-Celis. There, the ICE agent began chasing the driver, who was Alfredo Aljorna, not the registered owner of the vehicle, by the way.

And this was basically a case of mistaken identity, according to the Hennepin County attorney. So -- and you will see this video here, and this video is absolutely crucial to this case. So you see Alfredo Aljorna, the driver, slip and fall on the ice. The agent, Christian Castro, chases him. There is a brief scuffle here.

And then you see the two men run inside the home. And according to the Hennepin County attorney prosecutors, who have filed charges, Castro then opened fire through the door, striking Sosa-Celis in the leg and also putting in danger several people who were inside the home, including children.

So, Boris, Hennepin County prosecutors had already charged second degree assault and making a false statement because, according to their complaint, Castro had given a completely different narrative to the FBI agent there, claiming that he had been beaten and that he was in fear of his life, and that's why he shot. Video evidence showing otherwise.

And so, again, the bottom line here is that, as state prosecutors continue to try to bring Christian Castro into custody on those cases, DOJ is now filing charges. It is our understanding he is not in custody either federally or in the state case. He has not been extradited to Minnesota.

This case is developing rapidly, Boris, but the bottom line here, this is a watershed moment, as the Department of Justice charges one of the immigration agents for conduct that happened on duty during one of these surges -- Boris.

SANCHEZ: We will see if he's soon detained.

Whitney Wild, thank you so much for that.

A new crackdown from the Trump administration to share with you. The Justice Department is issuing a legal directive requiring every state to report undocumented immigrants or lose federal funding for low- income families. It's the latest move by the administration to force states to cooperate in President Trump's aggressive immigration crackdown.

CNN's Priscilla Alvarez has some new reporting on this.

So, Priscilla, what are the details?

PRISCILLA ALVAREZ, CNN CORRESPONDENT: Well, this is yet another example of the Trump administration trying to compel states to assist President Donald Trump's aggressive immigration crackdown, and the consequence if they don't is potentially losing these critical funds.

So this came through a new legal opinion that was issued through the Justice Department. What they are describing they did here was a revision or a clarification of a Clinton era opinion. There's a difference between the two.

The Clinton era opinion was far more narrow. In that case, there was a reporting requirement for the agencies within a state that were administering the programs for Temporary Assistance for Needy Families, as well as Supplemental Security Income.

Now, what this revision and this new legal opinion says is that all agencies within a state must provide information about undocumented immigrants residing in the United States to the federal government. If they do not, then they could risk losing these funds. So it's a much broader approach to what was the case in that Clinton era opinion.

Now, the Justice Department had this to say about the opinion yesterday. They said -- quote -- "When a state chooses to participate in TANF, it accepts the obligation to report illegal aliens in the United States. Tax dollars intended to help vulnerable Americans should not perversely encourage illegal entry into the United States, but rather should reinforce our laws and our borders."

Now, Boris, it's important to note undocumented immigrants are not eligible for federal benefits unless in limited exceptions. So it's unclear how the administration is going to implement this. We know from the opinion that this is for future funding. It's not retroactive, but it's also likely going to face legal challenges.

We have already seen that in other similar cases. Critics, of course, saying that the administration is trying to force states to comply with the administration's agenda and using welfare benefits as leverage to do that.

SANCHEZ: Priscilla Alvarez, thank you so much for walking us through that.

We are still awaiting Vice President J.D. Vance, who will head to the podium in the White House at any moment.

And, also, we're following dangerous flooding and water rescues taking place in parts of Texas, communities there getting a month's worth of rain in just a few hours. Your forecast is next.

(COMMERCIAL BREAK)