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CNN This Morning

Today: Federal Reserve Expected To Announce Rate Cut; Hezbollah Vows Retaliation For Pager Explosions; "Diddy" Denied Bail, Charged With Sex Trafficking, Racketeering; Phoenix Has First Sub-100 Temperature Day Since May. Aired 5-5:30a ET

Aired September 18, 2024 - 05:00   ET

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

[05:00:47]

KASIE HUNT, CNN ANCHOR: It's Wednesday, September 18th.

Right now on CNN THIS MORNING:

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DONALD TRUMP, FORMER U.S. PRESIDENT & 2024 PRESIDENTIAL CANDIDATE: Will he do a half a point? Will he do a quarter of a point?

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HUNT: A consequential cut. Today, the Fed expected to cut interest rates. What that could mean for you?

Plus, a coordinated attack. Hundreds of pagers exploding nearly simultaneously in Lebanon, stoking fears of a wider war.

And this --

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KAMALA HARRIS, VICE PRESIDENT OF THE UNITED STATES & 2024 PRESIDENTIAL CANDIDATE: This is exhausting and it's harmful and it's hateful.

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HUNT: Denouncing harsh rhetoric. Kamala Harris taking on Donald Trump with a message about who she thinks deserves to stand behind the seal of the presidency.

And later, disturbing allegations and lurid details. Sean "Diddy" Combs accused of sex trafficking, forced labor, and kidnapping. A new indictment detailing crimes dating back 16 years.

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HUNT: All right, 5:00 a.m. here on the East Coast, a live look at Capitol Hill on this morning.

Good morning, everyone. I'm Kasie Hunt. It's wonderful to have you with us.

Later today, a major announcement expected that could have a big impact on the economy less than seven weeks out from Election Day. The Federal Reserve widely expected to announce they're cutting the benchmark lending rate after keeping it at a 23-year high for more than a year.

Here's what Fed Chairman Jerome Powell -- Jerome Powell's announcement could mean -- would mean for Americans. Borrowing would get cheaper. Ideally, that leads to more business investment, resulting in companies hiring more and selling more. Probably because consumers would feel more inclined to spend money with these expected lower rates.

This could be just the first of many cuts to come, but the move already expected and is already being politicized. Donald Trump trying to get ahead of this big announcement. He's claiming the cuts are needed because of the Biden-Harris administration.

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TRUMP: The economy is now not good and interest rates -- you'll see, they'll do the rate cut and all the political stuff tomorrow, I think. And will he do a half a point? Will they do a quarter of a point?

But the reason is because the economy's not good, otherwise you wouldn't be able to do it.

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HUNT: Vice President Harris naturally doesn't see it that way, maintaining the Biden administration inherited an economy in freefall from Donald Trump and that they're still working to repair it.

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HARRIS: As of today, we have created over 16 million new jobs, over 800,000 new manufacturing jobs. We have the lowest Black unemployment rate in generations. We have invested in small businesses.

Is the price of groceries still too high? Yes. Do we have more work to do? Yes.

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HUNT: All right. Let's bring in Jeanna Smialek, Fed and economics correspondent for "The New York Times".

Good morning to you, Jeanna. Thank you so much for being here. Really appreciate it.

Let's kind of cut through all this here. The question today seems to be not whether the Fed is going to cut rates, but by how much, and the reason for that seems to be because they may have waited too long and left interest rates too high for too long. What is the thinking here? And what impact does it have for people? JEANNA SMIALEK, FED & ECONOMICS CORRESPONDENT, THE NEW YORK TIMES:

Yeah. So I think the Fed is facing a set of trade-offs here. Anytime that you are thinking about interest rates, they're sort of two things you're thinking about. One is, are you bringing inflation under control? You know, the Fed raised interest rates in the first place to control prices by slowing down demand in the economy.

And the second is, are you slowing the job market? High interest rates have a side effect and that is that they cool the job market off overtime. I think the question is, is the Fed worried enough about the recent slowdown in the job market to really go big and cut by half a percentage point today? Or are they going to take takes more muted step, cut by a quarter point and a signal that there's more to come in the future?

And so, those are the two options available to them. I think its going to be tricky option or a tricky needle for them to thread today because if you go by a quarter point, if you do just a little move, there's a risk that you signal that you're not really alert to how quickly the job market is slowing. But if you do that half-point cut, there's a risk that you signaled that you're nervous that things are falling apart.

[05:05:00]

And so, I think that there are two big risks. They're trying to walk a middle ground between them.

HUNT: Yeah, and the politics of this are pretty complicated. We saw a letter up from senators -- led by Senator Elizabeth Warren, who many people are familiar with is often tries to take the pro-consumer stand on these kinds of issues and they say that if the Fed is too cautious, they wrote this letter in cutting rates, it would needlessly risk our economy heading toward a recession.

They're actually arguing in this letter for 7 -- you know, 0.75, not -- three-quarters of a point rate cut. That seems clear. It seems clear that that's not going to happen. But again, this seems to be about jobs and whether the unemployment rate is going to get too high.

SMIALEK: Yeah. You know, there are reasons to worry that the unemployment rate is going to get too high. We've seen unemployment move up to 4.2 percent over the course of the past year. That's up from 3.4 percent. So it's a pretty dramatic increase over a relatively short period of time.

That said, 4.2 percent is still pretty low by historical standards. And overall, the economy is sort of looks like its returning to something that pure sort of roughly in line with the normal we were used to before the pandemic, rather than falling to pieces.

And so I think that's the challenge for the Fed. They have to look at this job market and figure out, is this return to normal? Or is this a slowdown that we need to be concerned with? And I think those call for two very different policy prescriptions and that's sort of the tricky balance that they're trying to strike at the moment. HUNT: Jeanna, there seems to be this perception that if Donald Trump

gets reelected, the rate environment would be much different than if say Democrats like Kamala Harris were to keep the Democratic hold on the White House. Do you buy that?

SMIALEK: So I think -- I think that it's possible that that is true, but probably not in the direction most people think. The Federal Reserve is independent of the White House. They do not set policy based on what the president wants. It does not matter what the president is telling them. They do not have to listen.

So, Donald Trump is promising to drastically cut interest rates but that is not actually a power within his toolbox. He doesn't have that capability. And he'll usually couch it in this idea that he's going to drive inflation down because he's going to cause so much its drilling and so much oil production. I've talked to a lot of oil economist about this.

They tell me that it's just -- can't push oil prices down like that. It doesn't work. The math doesn't work. Oil companies wouldn't produce the levels that he's -- he's promising. So, that first link in that chain doesn't work.

And in fact, most economists will tell you that a lot of the other policies Mr. Trump is suggesting would potentially push inflation up and so if we had a situation under Mr. Trump where inflation was rising, you could actually see a little bit higher interest rates under his watch.

HUNT: Really interesting. All right. Jeanna Smialek for us this morning, thank you so much for starting us off. I really appreciate it.

All right. Coming up here on CNN THIS MORNING: Donald Trump back on the campaign trail.

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TRUMP: Only consequential presidents get shot at when I say --

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HUNT: The former president seemingly unfazed after that second apparent attempt on his life.

Plus, bombs in beepers? Exploding in the pockets of Hezbollah members. How Israel pulled off this attack.

And AR-15s, drugs, more than 1,000 bottles of personal lubricant. Attorneys lay out the indictment against music mogul Sean "Diddy" Combs.

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DAMIAN WILLIAMS, U.S. ATTORNEY, SDNY: A year ago, Sean Combs stood in Times Square and was handed a key to New York City. Today, he's been indicted and will face justice in the Southern District of New York.

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HUNT: All right. Welcome back.

A highly coordinated wave of explosions targeting pagers on the hips of Hezbollah militants shocking Lebanon and once again further concerns of a wider war in the region.

We want to warn you, the footage you're about to see maybe disturbing.

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HUNT: CNN learning that yesterday's explosions were part of a joint operation between Israel's intelligence service, and the Israeli military.

"The New York Times" reporting the blast happened almost simultaneously, at least nine people are dead, including an 8-year-old girl, more than 2,000 injured. Hezbollah, which the U.S. considers a foreign terrorist organization, has vowed to respond to the attack and some people in Lebanon calling for swift retaliation.

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AHMAD CHAMAS, BEIRUT RESIDENT: This is an earthquake that must be met with response from the resistance. A decisive, destructive, and shattering response, even if it leads to war.

SUHAIL ISKANDAR, TEACHER: It has to escalate. That's how the situation seems. I don't know, action and reaction, no one really knows honestly.

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HUNT: All right. Joining me now, CNN international anchor Max Foster with more on this.

Max, good morning to you. What a remarkable events. What is the latest you're -- what we know about how the Israelis pulled this off?

MAX FOSTER, CNN INTERNATIONAL ANCHOR: Well, there was a factory. It's a Taiwanese company that made these pagers and they had a factory in Hungary, as we understand it. We don't know where the devices were tampered with and from what we know, they needed to have been tampered with because what our sources are saying is that an explosive had been put into these pagers, which would have required a switch as well, which could have been set off remotely. We're not quite sure exactly how that would work.

[05:15:00] But there were initial reports that this was just a case of overheating the batteries and getting them to explode. But now, we understand there was actually explosives within the pagers. They must have got there somehow, either via Mossad or the defense ministry or some sort of system that they had in place.

But we don't know where it happened. So, whether it was in the factory, you know, on the way to the factory, that's what people are investigating at the moment, but it's early days, but a really sophisticated operation and deadly as we've seen.

HUNT: Deadly indeed.

And, Max, there -- this was what our Nick Paton Walsh wrote about this. He says that the timing is telling. On Monday, the Israeli Defense Minister Yoav Gallant said during a meeting that the time for diplomacy with Hezbollah has passed and military might could take center stage. Literally hours later, their enemy's entire communications infrastructure was hit with an attack that according to Lebanese security source, used pagers purchased by Hezbollah in recent months.

And so this necessitated a long lead time in the operations planning. So, basically, they're saying, this has been going on for a long time. And while we've, of course, focused on -- I mean, the pictures from these attacks, the sort of idea that you're something you have in your pocket could explode at any moment is all very dramatic.

The reality is the leader of Hezbollah had warned his people off of using cell phones because of the possibility of for surveillance. This was a main source of communication for them and that is affecting that very much affects their capabilities to act, no?

FOSTER: Yeah. So there were told not to use mobile phones, to use pagers instead and thousands of them, hundreds of them have been taken out so they can't use those pagers now and then now I'm sure questioning how they're going to communicate and then looking for an alternative system.

Obviously, Hezbollah thought they'd got away from any sort of compromised by Israel, by switching people two pagers because they're analog, but this remarkable work around the Israelis appear to have found has been highly effective.

You've got to remember, you know, there are tens of thousands, if not hundreds. Its a thousands of Hezbollah members and, you know, it was awful as this incident was and deadly and people injured, including civilians, it seems, you know, they -- we're talking about hundreds low thousands of Hezbollah members who have been affected by this.

So it's not as if Hezbollah and all his communication has been entirely undermined.

HUNT: Right, really interesting. And, of course, it all speaks to this fear of the escalation of this into a wider conflict.

Max Foster, for us this morning -- Max, always grateful to have you. Thank you so much.

FOSTER: Thank you, Kasie.

HUNT: All right. Still to come here after the break, Sean "Diddy" Combs denied bail.

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MARC AGNIFILO, ATTORNEY FOR SEAN "DIDDY" COMBS: They didn't want him to surrender because if he surrenders, they don't get to tell the judge that he's a flight risk and he's a danger.

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HUNT: The music mogul facing life in prison.

Plus, heightened political rhetoric turning into a blame game between Democrats and Republicans.

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HARRIS: When you had that kind of microphone in front of you, you really ought to understand at a very deep level how much your words have meaning.

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HUNT: All right. Twenty-one minutes past the hour. Here's the morning roundup.

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WILLIAMS: Combs abused, threatened, and coerced victims to fulfill his sexual desires, protect his reputation and conceal his conduct.

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HUNT: Sean "Diddy" Combs indicted in New York, charged with racketeering conspiracy and sex trafficking. Among the allegations in the complaint, Combs is accused of running a criminal enterprise and hosting freak offs, coerced sex acts. He's charged with orchestrating and recording. Combs pleaded not guilty.

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AGNIFILO: We're going to fight this case with everything we have as does he, and eventually, he's going to be shown to be innocent.

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HUNT: Combs was denied bail and will remain in federal detention. He faces a life sentence. Paul Whelan speaking out after his release from a Russian prison. Whelan was held by Russia for more than five-and-a-half years and was recently least in a prisoner exchange. He spent the last five days of his ordeal in solitary confinement. Whelan visited the -- five years, Whelan visited the Capitol this week, talking to about what he faced while in Russia and his relief to be home.

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PAUL WHELAN, FREED FROM RUSSIAN PRISON: For the Russian said, the poor conditions were part of the punishment and coming back to see this sort of thing now is a bit of a shock, but it's a good shock.

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HUNT: The House set to vote on a six-month government funding bill today that seemingly already doomed. Speaker Mike Johnson putting it up for a vote anyway, just to demonstrate that it will fail before he moves to a backup plan.

That plan B, however, is unclear and government funding runs out at the end of the month.

All right. Time now for weather. After 113 days, Phoenix finally sees temperatures below 100 degrees. That same cold front, I don't know if it's a cold front, but it is set to bring cooler temperatures across the West.

Let's get to our meteorologist, the weatherman, Derek Van Dam.

Derek, is this really a cold front?

DEREK VAN DAM, AMS METEOROLOGIST: It is.

HUNT: OK.

VAN DAM: And take from this snowboarder as this type of video makes my heart absolutely sing, the first snowfall of the season, falling from the sky. Yes, I love to see the changing seasons, so does this puppy.

This is coming out of mammoth lakes area. They saw some measurable snow and as Kasie mentioned, you have people in Phoenix who are having a party this morning because their mercury in the thermometer did not climb above 104 for the first time in 113 days. That's saying something.

So definitely the cool down over the western U.S., you can see it from Seattle, San Francisco, to Los Angeles.

[05:25:01]

There's Phoenix temperature, it'll stay below 100.

Now, the other stories that we're following today, the severe weather chances across the nation's midsection heads-up western portions of Minnesota, large hail, some damaging winds as well with some storms fire up later today.

Remember what happened two days ago? This is coming out of Carolina Beach in North Carolina from a non-named tropical system. What were still, still feeling the effects of this entity, we'll call it, it's still bringing rainfall to portions of the mid-Atlantic.

We'll see a few showers from D.C. through Philadelphia all the way to New York, eventually over spreading Boston, another one to two inches of rainfall across the Mid-Atlantic.

And I'll leave you with this, Kasie. Did you see the partial lunar eclipse that occurred last night with the super moon, the harvest super moon? Of course, you didn't. It was at 10:30. We should both be sleeping.

HUNT: I was most definitely asleep, most definitely asleep. That is several hours pass my bedroom, but that looks amazing.

Derek Van Dam for us this morning, Derek, thank you so much.

All right. Still ahead here on CNN THIS MORNING: Michigan, Wisconsin, Pennsylvania, they always play a critical role in determining whom who will win the White House. Up next, we're going to speak with a man who coined the phrase the "blue wall" about how voters in those states are weighing key issues in this election cycle.

Plus, a new book taking a deep dive into how Donald Trumps rise on "The Apprentice" helped sweep him into the White House almost a decade ago.

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TRUMP: My name is Donald Trump and I'm the largest real estate developer in New York. I own buildings all over the place, model agencies, the Miss Universe pageant.

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