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Early Start with Rahel Solomon
Wall Street Sell-Off Worsens Amid Tariffs, Recession Fears; Search Continues In Dominican Republic For Missing Student; D.A. Opposes Resentencing Request For Menendez Brothers. Aired 5:30-6a ET
Aired March 11, 2025 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[05:33:40]
RAHEL SOLOMON, CNN ANCHOR: Welcome back, and back to the markets. The U.S. stock market's three major averages fell significantly on Monday. The sell-off extending what's been really a miserable month for U.S. shares.
CNN's Richard Quest takes a closer at what's spooking investors.
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RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE, ANCHOR, "QUEST MEANS BUSINESS": After several sessions of sharp falls the market was looking for any reason to be cheerful. Unfortunately, President Trump's comments over the weekend when he wouldn't rule out a recession gave them exactly the opposite.
MARIA BARTIROMO, FOX NEWS HOST, "SUNDAY MORNING FUTURES WITH MARIA BARTIROMO": Are you expecting a recession this year?
DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES: Um, I hate to predict things like that. There is a period of transition because what we're doing is very big. We're bringing wealth back to America.
QUEST: Investors are now deeply concerned not only about the trade tariffs but the reversals in foreign policy, the battles that are happening with close allies, and also what's likely to happen to the federal deficit, the government shutdown, and federal spending with the new budget on the horizon.
I throw all that at you for the simple reason it shows the sheer amount that the market is trying to digest at the moment into this maelstrom of misery and throwing the tariffs. And you can understand why in some cases it's best to do nothing and stay on the sidelines. In other cases put off investment decisions.
[05:35:05]
Whatever is happening the long-term prospects are simply too uncertain at the moment because as long as the president keeps changing his mind the markets will keep selling off. Richard Quest, CNN, London.
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SOLOMON: And Delta Airlines citing economic uncertainty Monday as it slashed its first-quarter profit estimate by half. The move sending its shares down as much as 14 percent. The Atlanta-based airline is the first major U.S. carrier to report that economic worries are putting a dent in consumer and business travel.
Ken Rogoff is a professor of economics and public policy at Harvard University. He is also the former chief economist at the International Monetary Fund and joins us this morning from Cambridge, Massachusetts. Ken, a pleasure to have you this morning.
KEN ROGOFF, PROFESSOR OF ECONOMICS AND PUBLIC POLICY, HARVARD UNIVERSITY, FORMER IMF CHIEF ECONOMIST (via Skype): Thank you.
SOLOMON: Economic uncertainty -- that's a phrase we're hearing a lot these days. Recession -- that's a phrase we're hearing a lot these days.
You said earlier this week that you see the risk of a recession this year rising to 30 to 35 percent. JPMorgan puts it at 40 percent. Quite simply, Ken, why? What are your biggest concerns right now for growth?
ROGOFF: Well, the biggest concern is uncertainty over policy. The president says he wants to have tariffs. Some days they're high, some days they're low. Some days they're on one country; some days they're on another country. And nobody quite knows what's going on.
People are nervous about Elon Musk and DOGE. They don't know where that's going.
When Trump came in, he -- there was a lot of enthusiasm -- deregulation, tax cuts. That hasn't happened yet and instead they're sort of seeing the dark side of everything.
SOLOMON: Yeah. We just played a clip over the weekend of President Trump refusing to rule out a recession this year. He said he hates to predict them, suggesting that they're hard to predict. Ken, to be fair, they can be hard to predict, right? We all remember a few years ago those growing fears and calls for a recession that never materialized.
Do you think that the fears now are overblown?
ROGOFF: Well, you're right. A silver lining to the president's comments over the weekend was honesty that it's hard to predict if there is a recession. But what bothered people is that a lot of us (investors) think that what's causing concerns about a recession are his policies, particularly the tariffs. The uncertainty about where everything's going.
And people had thought that well, if the market is sending a strong signal, if the dollar is tanking, if markets -- the stock market is going down he'll pull back. He recalibrates. He'll reassure people. Instead, he's saying oh, that's just part of my master plan. So that's what got everybody so worried.
SOLOMON: Yeah. Something you said in Davos earlier this year caught my attention. You said that the U.S. economy is in for a wild ride. I mean, I think a lot of people would say it's already felt pretty wild.
Do you think we've reached peak volatility yet and, if not, when do you see that time coming?
ROGOFF: I don't think we're near it yet. I mean, I think I've been writing for a while. I have a book coming out about this, "Our Dollar, You're Problem" that says this was coming. But it's been so accelerated by what Trump has been doing.
He could calm things down. He has a lot of moves he could make which would calm things down. But what really bothered people on Sunday is he -- you know, he didn't pull any of his cards. So you wonder do they know what they're doing?
SOLOMON: Yeah, that book coming out in May if I'm not mistaken. I did preorder this morning, Ken, so looking forward to reading that.
We know that Trump is expected to speak in less than 12 hours at the Business Roundtable quarterly meeting. What does he say? What can he say to settle the markets, and do you expect him to?
ROGOFF: He seems really stuck on the tariffs -- that that's his thing. That's this defining policy. That's how he's going to reshape globalization.
And what I'm hearing from people involved in negotiations with the U.S. is that they're saying tariffs are coming. We're just looking at America. We're not looking at you. And the trouble is the tariffs are worse for the United States than they are for anyone else. We pay the -- we pay the cost.
Now, I hope it all shakes out well. I hope this all goes smoothly and somehow there is a master plan. But your -- markets and I think all of us are starting to get nervous that there might not be.
SOLOMON: And then just lastly Ken, let's say you're at a cocktail party. A friend corners you and says, "Ken, what do I do right now? I mean, do I sit still?" I mean, what do you say?
ROGOFF: First of all, you cannot believe how many emails I get about should I sell everything. Elon Musk can see my treasury holdings. Should I sell my treasuries? I mean, the answer is to stay calm. It's very hard to second guess the market but it's not easy right now even for myself.
SOLOMON: Yeah, here, here.
[05:40:00]
Ken Rogoff, appreciate the advice and the commentary. Appreciate the insights this morning. Thank you.
ROGOFF: Thank you.
SOLOMON: All right. And still to come for us the latest in the search for a missing American college student in the Dominican Republic. We'll have the details after this short break.
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SOLOMON: Welcome back. I'm Rahel Solomon, and here are some of the stories we're watching for you this morning.
Concerns over President Trump's trade policy led to a steep sell-off on Wall Street Monday. The Dow dropping nearly 900 points to close down two percent -- it's worse day of the year so far. In an interview that aired Sunday, Mr. Trump had refused to rule out a recession.
[05:45:00]
A cargo ship smashed into a U.S. military chartered oil tanker. This happened off the coast of England Monday causing a massive fire which is still burning. The container ship was carrying sodium cyanide and alcohol, and the tanker was loaded with jet fuel. The British Coast Guard says that the search for a missing crew member has ended, and the person has not been found.
Nearly 300 families were forced to evacuate their homes after a volcano in Guatemala started spewing gas and ash into the sky. Another 30,000 people are being urged to leave the area. The volcano is one of the most active in Central America.
New details this morning in the search for a missing student in the Dominican Republic. The 20-year-old University of Pittsburgh student was last seen on a beach in the resort town of Punta Cana.
CNN's Danny Freeman has the latest.
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DANNY FREEMAN, CNN CORRESPONDENT (voiceover): Dominican National Police are leading the search for 20-year-old Sudiksha Konanki, deploying drones, canine units, and helicopters in the area around the Riu Republica Hotel in Punta Cana where Konanki was last seen.
Her family has now traveled to the Caribbean nation to help with the search. Her father telling ABC News --
SUBBARAYUBU KONANKI, FATHER OF MISSING STUDENT: My daughter said that she is enjoying her trip on spring break and everything was going OK.
FREEMAN (voiceover): What's unclear though is if foul play was involved or if there was a terrible accident.
Konanki was last seen with a group of seven other people in the early morning hours last Thursday. The group was drinking on resort grounds before heading to the beach around 4:15 a.m., according to a law enforcement source.
According to law enforcement sources, surveillance cameras showed five women and one man leaving the beach around 5:55 a.m. Konanki is believed to have stayed behind with a young man in his 20s. The CCTV cameras also show that man left the beach area around 9:55 a.m., about four hours later, with no signs of Konanki.
The man who may have been the last person to see Konanki before she disappeared has been interviewed by police. Sources say the young man is not considered a suspect at this time. But one source told CNN that his version of events has changed slightly in three different accounts to authorities. In every version he said they were at the hotel beach and went into the ocean, but then he got out after feeling sick and fell asleep on a lounge chair. But he had different accounts of when he last saw Konanki.
A cover-up belonging to Konanki was found in a lounge chair on the beach and authorities say there are no signs of violence.
Originally from India, the Konanki family has lived in the U.S. since 2006 and are permanent residents. Law enforcement officials in Loudoun County, Virginia where they currently reside are not ruling anything out.
SHERIFF MICHAEL CHAPMAN, LOUDOUN COUNTY, VIRGINIA: I'm not going to rule anything in or rule anything out. Obviously, the circumstances are concerning as to what happened down there and we're looking into it the best that we can.
FREEMAN (voiceover): Konanki's father told CNN he wants authorities to investigate all possibilities, including whether this is a case of kidnapping or human trafficking.
For her part, Konanki is a biology major at the University of Pittsburgh and she's on the board of a South Asian fusion acapella group. Her father describing her as a very nice girl, ambitious. "She wanted to pursue a career in medicine."
On campus shock and sadness.
ALLISON LEWIS, FRESHMAN, UNIVERSITY OF PITTSBURGH: It's definitely really, like, concerning. It's definitely something that everyone should be really processing because it could happen to anyone.
FREEMAN: Now, in a post to social media on Monday, the Dominican National Police reiterated they are doing all that they can to try and find Konanki. That includes reinterviewing potential witnesses. Also expanding their forensic survey of the surveillance video that they have already captured.
And the amount of resources that the Dominican Republic has dedicated to this search truly is staggering. It includes the Dominican Army, Navy, and Air Force and, of course, our own FBI.
Danny Freeman, CNN, Pittsburgh, Pennsylvania.
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SOLOMON: All right, now to Los Angeles County where the district attorney there says that he does not support a request for Erik and Lyle Menendez to be resentenced. The Menendez brothers were convicted of murdering their parents in 1989 at their Beverly Hills home.
Now both claim that their father physically and sexually abused them and that their mother was aware but chose to do nothing.
Both were originally handed life sentences without the possibility of parole but they're not pursuing motions for clemency, resentencing, and a new trial.
District Attorney Nathan Hochman says that the brothers lied about their role in the killings and their motivations, and that they need to acknowledge that before they're considered for release. Take a listen.
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NATHAN HOCHMAN, L.A. COUNTY DISTRICT ATTORNEY: Again, we have laid out a pathway for the Menedez brothers to potentially get out of jail. It requires them to finally, after 30-plus years, fully acknowledge and completely accept responsibility for the entire breadth of the crimes and all the lies that they have told, including their defense at trial of self-defense.
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[05:50:00]
SOLOMON: The family of Erik and Lyle Menendez released a statement criticizing the prosecutor's decision to oppose resentencing.
Overseas, former Philippines President Rodrigo Duterte has been taken into custody by police in Manila. This is on an arrest warrant issued by the International Criminal Court. The warrant was issued for alleged crimes against humanity in connection with his deadly crackdown of drugs before he left office in 2022. Now, Duterte has denied the extrajudicial killing of alleged drug suspects, but he has admitted to ordering police to shoot suspects who resist arrest.
Human rights groups are welcoming his arrest and urging the Philippines to hand him over to the ICC.
Catherine, Princess of Wales, attended the annual Commonwealth Day service on Monday after missing last year's event because she was receiving cancer treatment. She was joined by her husband Prince William and other members of the royal family at London's Westminster Abbey.
Kate announced earlier this year that she was in remission from the disease.
It was also King Charles' first appearance at the event in two years. That's after his own cancer diagnosis forced him to briefly step away from public-facing duties.
And a landslide destroyed dozens of homes in the capital of Bolivia on Monday. Local officials say that the disaster was caused by heavy rainfall that had saturated the soil. Residents were able to retrieve some of their possessions from their homes. Security teams cleared the damage structures before allowing residents to return. At least 40 families were affected by the landslide.
And still to come for us a powerful tornado hit Central Florida. We'll hear from authorities there assessing the damage when we come back.
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[05:56:00]
SOLOMON: Welcome back.
In the coming hours, U.S. Vice President J.D. Vance is expected to meet with House Republicans before a critical vote on a bill to fund the U.S. government through September. Time is running out though with a possible government shutdown looming, although House Speaker Mike Johnson insists that nothing will derail the bill.
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REP. MIKE JOHNSON (R-LA), SPEAKER OF THE HOUSE: The CR will pass.
MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: And even -- what if it gets blocked?
JOHNSON: I don't think it's going to get blocked.
RAJU: What makes you so confident that it'll get passed?
JOHNSON: Because no one wants to shut the government down, And we are governing and doing the responsible thing as Republicans.
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SOLOMON: Our Manu Raju there.
And the deadline for a shutdown is this Friday. And it appears that there is no plan B if the bill fails to pass. And Johnson has little room for error with a razor-thin Republican majority and the likelihood that Democrats will be unified in their opposition to it.
The House bill would boost defense spending by about $6 billion while cutting domestic spending by about $13 billion. It also includes more money to carry out deportations of undocumented migrants.
A powerful tornado tore through Florida's Seminole County on Monday. The National Weather Service measured winds as strong as 115 miles an hour. It touched down about 10 miles north of Orlando leaving behind a trail of destruction. One house was almost destroyed while others suffered significant damage.
The fire department says it is still assessing the area.
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TOD ZELLERS, SEMINOLE COUNTY FIRE DEPARTMENT: I see lots and lots of trees down, a lot of debris. There is pieces of roof, shingles, trees, parts of cars, garage doors. So there was a significant amount of minor damage.
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SOLOMON: And Hurricane Milton also swept through the area in October of 2024.
And Tuesday marks five years since COVID-19 was declared a pandemic. That designation came after the World Health Organization determined the outbreak was an international public health emergency. Before COVID, the last pandemic was in 2009 with the H1N1 flu, which killed hundreds of thousands of people worldwide. U.S. health officials say that COVID-19 had killed almost 1.2 million people in the U.S. as of last June.
Former first lady Michelle Obama is jumping back into the podcast world, according to her production company. The podcast will be called "IMO" short for in my opinion. She will host the podcast with her older brother, basketball executive Craig Robinson. Now, Obama says that they're launching the podcast to allow people to "have thoughtful conversations about life." The first two episodes are set to be released on Wednesday.
And a big year for red-hot rapper Doechii just got a lot bigger.
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DOECHII, RAPPER-SINGER: Singing "Denial Is A River."
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SOLOMON: The rapper has been named Billboard's 2025 Woman of the Year, joining the ranks of Madonna, Taylor Swift, Billie Eilish, and others. The honor follows her first-ever Grammy win for Best Rap Album, which she received in January along with nominations for Best New Artist and Best Rap Performance. Billboard says that Doechii will be honored at an event later this month.
And finally, Crufts, apparently the world's biggest dog show, was held in England on Sunday and the top dog award went to an Italian whippet. Miuccia is four years old. Her handler describes her as the sweetest dog. Aren't they all, though? She's the first Italian dog to win the Best in Show prize at the event.
And how about this fun fact? Apparently, six times as many dogs compete at Crufts as at the Westminster Dog Show -- the famed U.S. competition held here in New York every year.
I don't know that my dog would win any awards nationally or internationally, but he is certainly best in show at our house. Thanks for joining us here on EARLY START. I'm Rahel Solomon here in New York. "CNN THIS MORNING" begins right now. I'll see you tomorrow.
