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Federal Prosecutors Open Criminal Probe of Fed Chair Jerome Powell; Sources Say, 1,000 More CBP Agents Expected to Deploy to Minneapolis; Trump Weighs Iran Military Intervention Amid 500-Plus Protesters Deaths. Aired 10-10:30a ET

Aired January 12, 2026 - 10:00   ET

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

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PAMELA BROWN, CNN ANCHOR: Happening now, shocking investigation. After a year of insults and threats to fire Fed Chair Jerome Powell, the Trump administration is opening a new criminal probe into him. And that investigation has Powell issuing his strongest rebuke yet as he warns that the Fed's independence is at stake.

And intensifying surge, the Trump administration is sending hundreds of additional immigration agents into Minneapolis where there have been days of intense protests after a deadly ICE-involved shooting. CNN's new reporting on the enhanced deployment.

WOLF BLITZER, CNN ANCHOR: And, quote, prepared for war. Iran says it's ready to respond to any attacks from the United States, as President Trump considers possible intervention there, as deadly protests spread across the country.

And arson attack, Mississippi investigators say someone burned down the state's oldest synagogue. And now the FBI is involved in the investigation.

We want to welcome our viewers here in the United States and around the world. I'm Wolf Blitzer with Pamela Brown, and you're in The Situation Room.

And we begin with stunning news here in Washington that federal prosecutors have started a criminal investigation of the Federal Reserve chair, Jerome Powell, and Powell is pushing back hard. The issue was Powell's testimony to Congress last June about the $2.5 billion renovation of the Federal Reserve buildings here in Washington.

President Trump toured the construction site with Powell last July and seemed to catch Powell off guard when he said the cost of the project had gone up. It was an awkward moment, a month before Powell had appeared before Congress and disputed what he called inaccuracies being reported about the project.

(BEGIN VIDEO CLIP) JEROME POWELL, FEDERAL RESERVE CHAIR: But there's no new there, there are no special elevators. There's just -- they're old elevators that have been there. There are no new water features. There's no beehives and there's no roof terrace gardens, other than that, you know? So, all of the sort of inflammatory things that the media carried are either not in the current plan or just inaccurate. So --

(END VIDEO CLIP)

BLITZER: All right. Let's go live right now to CNN Business and Politics. Correspondent Vanessa Yurkevich. Vanessa, what do we know about this investigation just announced of Chairman Powell?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes, this investigation really goes to the heart of what we've been hearing from President Trump for months now, this inquiry into whether or not Jerome Powell essentially lied to Congress during that testimony in June, where he talked about the cost of renovations to the Federal Reserve's headquarters in Washington, D.C.

Initially, it was going to cost $2.5 billion, but there have been hundreds of millions of dollars in overruns. President Trump has really latched onto this so much so that, as you see there, he showed up to the Federal Reserve with Jerome Powell and tried to understand why things were over budget. The Federal Reserve and Jerome Powell has said, listen, this is a 100-year-old building. We've had to remove his asbestos, we've had to remove lead. We've had to make this handicap accessible. And, ultimately, yes, this has cost more but Jerome Powell has said that they have both kept the public and Congress abreast of these changes.

Now, Jerome Powell, in a video statement late last night, said, this actually has nothing to do with these renovations. It has to do with something else. Listen to Jerome Powell and what he said.

(BEGIN VIDEO CLIP)

POWELL: This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead, monetary policy will be directed by political pressure or intimidation.

(END VIDEO CLIP)

YURKEVICH: So, Jerome Powell there essentially saying that this is really directed at the Federal Reserve and what they have been doing with interest rates. This has nothing to do with the renovations itself.

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It points to the fact that President Trump potentially has not really been happy with the Federal Reserve, which we know he hasn't.

But, Wolf, I'll just point out that the last three times the Federal Reserve has met, they have cut interest rates to some of the lowest Fed funds rate in three years. So, this investigation ongoing, but you hear from a usually measured Jerome Powell being very pointed in his response to the president and this investigation. Wolf?

BROWN: All right. Let's bring in CNN White House Correspondent Alayna Treene. Alayna, this view between Powell and the president's been going on for a long time, and, of course, this latest move is ratcheting up those tensions.

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: Oh, absolutely. And, actually, you know, I, I was covering the president very closely, even before he came back into office for his second term and during his transition after the election, he was already criticizing Powell then. This is a long feud between these men, really more so I would say on the president's side, over this idea of, you know, not cutting interest rates to his liking.

We've seen the president threaten several times that he was thinking about potentially firing him. We've reported in the past that his top officials have cautioned him against doing so, noting the reaction that you would likely see in the markets.

But in recent months, a lot of the attention and criticism coming from the administration and the president's allies toward Powell has been over what Vanessa was just laying out, over these renovations. And I actually remember closely covering back in July when the president went to tour some of these reservations and -- or, excuse me, renovations and the two of them sparred a bit. I want you to listen to that moment.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: It looks like it's about $3.1 billion. It went up a little bit or a lot. So, the 2.7 is now 3.1.

POWELL: I'm not aware of that.

TRUMP: Yes, it just came out.

POWELL: Yes. I haven't heard that from anybody the Fed.

You just added in the third building is what that is. That's a third building, including --

TRUMP: Well, it's a building that's being built.

POWELL: No, it's been -- it was built five years ago.

(END VIDEO CLIP)

TREENE: And just to clarify what they were kind of disputing there was whether the figure that the president was putting out was actually about the new renovations they were doing or the entirety -- the cost of the entirety of the project.

But look, I do think it's important to note that the president has insisted in -- overnight, in recent hours that he had nothing to do with this investigation. He told NBC in an interview that I don't know anything about it, but he's certainly not very good at the Fed.

I will note as well, though, it's kind of hard to parse that with what we heard from the president just about two weeks ago when he told reporters that he said, quote, we're thinking about bringing a gross incompetence, what's called gross incompetence lawsuit, against Powell, so kind of teasing that something like this could be coming.

All to say this all comes, as we know, that the president is zeroing in on who he wants to actually replace Powell with when Powell's term ends in May. We know he's looking at a couple people, including the national economic director, Kevin Hassett. He's also interviewed Kevin Warsh, a former Fed governor, has another interview coming up with a BlackRock executive. So, all of this coming as this investigation is getting underway.

BLITZER: I want to bring in CNN Legal and National Security Analyst Carrie Cordero right now. Carrie, this is certainly not the first time that we've heard the president talk about prosecuting the Fed chair. I want you to listen to what the president actually said at the end of last month, just a few weeks ago. Listen to this.

(BEGIN VIDEO CLIP)

TRUMP: We're thinking about bringing a gross incompetence, what's called gross incompetence lawsuit. It's gross incompetence against Powell.

I'd love to fire him, but we're so close. You know, maybe it -- maybe I still might.

(END VIDEO CLIP)

BLITZER: All right. Explain to our viewers why the Department of Justice's investigation into the independent Fed chair marks such a significant break from precedent.

CARRIE CORDERO, CNN LEGAL ANALYST: Well, I think this is a three- alarm fire from the chairman of the Fed issuing his video on Sunday night so that we're talking about it this morning. His statement was pre-indictment. So, he is looking at, I think, in my assessment, other actions that the president and this Justice Department have taken against individuals that the president views as political opponents, and he is trying to get ahead of it.

So, the Fed has received a grand jury subpoena. That is a criminal legal process, different than the remarks that the president made that we played a minute ago, which sounded to me like a civil type matter. This is a criminal investigation that the Justice Department has apparently opened against the chairman of the Federal Reserve, an independent agency, and an individual who is currently in government and has a statutory term.

BROWN: Just to step back, big picture, I mean, just talk about the pattern or scene of Trump's DOJ going after political adversaries.

CORDERO: Yes, I think there's some similarities and some differences. So, in terms of the differences this is an individual, Jerome Paul, who is currently in government. As I mentioned, he has a statutory term.

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The work of the Fed may be different than some of the individuals that have been targeted by the administration before. The work of the Fed is integral to the economic and national security of the country. This is an incredibly critical job for the health of the country across array of issues.

A similarity is the tactic that it appears the Justice Department is using, in particular an investigation about his Congressional testimony. That's the same tactic that they used in the indictment against Jim Comey. It was a charge that came forward from the grand jury based on, eventually thrown out by the courts, but a charge based on his Congressional testimony.

So, I think that's a particular tactic that they have seized on that they can use to try to pressure the Fed chair.

BLITZER: All right. Carrie Cordero, thank you very much, Alayna Treene, thanks to you as well, Vanessa Yurkevich, I appreciate it very, very much. Pamela?

BROWN: And happening now, Wolf, two federal law enforcement sources tell CNN that around 1,000 additional U.S. Customs and Border Protection agents are expected to deploy to Minneapolis, and this comes just days after an ICE agent shot and killed Renee Nicole Good, a U.S. citizen and mother of three. Sources tell CNN that agents started deploying on Friday, and that CBP Commander Gregory Bovino is conducting targeted door knocks.

All right, so let's bring in correspondent Priscilla Alvarez, who has been following all of this. What more can you tell us about this increased presence in Minneapolis?

PRISCILLA ALVAREZ, CNN CORRESPONDENT: Well, to start, Immigration and Customs Enforcement has been in Minneapolis for years, for decades. But the administration started increasing the presence of those officers in December. Earlier this month, we saw 2,000 additional federal agents sent to Minneapolis, and now my sources are telling me that another 1,000 U.S. Customs and Border Protection agents, so another immigration agency, are deploying to the city.

Now, this is again, part of the focus by the administration on this particular city, and it is an enormous amount of federal agents not only deploying to Minneapolis but also to other parts of the state, as they continue this immigration crackdown. And it's notable that this additional deployment, which started on Friday, comes on the heels of the local officials saying that they did not want these officers to continue coming to their city or their state given that there was that ICE-involved shooting last week.

Now, the Homeland Security secretary, Kristi Noem, has repeatedly said that that won't be the case. In fact, she has maintained that they're going to continue to have a presence there. But, typically, when this happens, it is the administration, and I say typically, we don't really have a precedent here. But when they do surge agents, as they have in other cities, it's for that additional immigration crackdown and also to serve in other functions, for example, what we saw last week, which is serving as a security perimeter around federal buildings where they may be doing processing.

BROWN: And, of course, tensions have been flaring on the ground there in Minnesota since that ICE shooting. Is there any indication that this would've happened regardless of that ICE shooting or is the administration sending this in the wake of that?

ALVAREZ: Well, again, prior to this, prior to that shooting, there were 2,000 additional agents that were sent because this has become politically charged, Pamela. Of course, the administration, the White House, the president has talked about Minneapolis, about the Somali community there amid this welfare fraud scandal that has been ongoing. So, that is an undercurrent in all of this, but the additional 1,000, I'm told, is after in the wake of this shooting and making that decision to send those additional agents there.

Now, again, the secretary, I said that they have arrested hundreds, over 1,000 immigration arrests occurring in Minneapolis. This is what she told our Jake yesterday.

(BEGIN VIDEO CLIP)

KRISTI NOEM, HOMELAND SECURITY SECRETARY: We've arrested dozens and dozens of murderers and rapists, individuals who have assaulted children and sodomized them. We just released a whole list of individuals just in Minnesota that we've arrested since we've surged personnel there, and it's incredible.

So, we would love it if the Minneapolis Police Force and the governor and the state police department would partner with us to help us do this.

(END VIDEO CLIP)

ALVAREZ: So, again, you see there her talking about this being an ongoing immigration crackdown, but, again, the number of agents on the ground there is remarkable for this one operation.

BROWN: All right. Priscilla Alvarez putting it into perspective for us, thank you very much. Wolf?

BLITZER: As she always does.

BROWN: She does.

BLITZER: And shocking new video shows a U-Haul truck apparently trying to plow through a crowd of protestors during demonstrations against the Iranian government.

And later, we'll ask Democratic Congresswoman Pramila Jayapal about those protests in Iran, President Trump's possible response and an upcoming vote on limiting his military powers.

Lots going on, stay with us. You're in The Situation Room.

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BLITZER: New this morning, intense video shows the moment a moving truck plows through a crowd of anti-Iranian regime protesters in Los Angeles. Officials say one person was hit, two people were evaluated at this at the scene but declined treatment. Police have detained the driver of that truck, a sign on the side of it read, and I'm quoting now, no Shah, no regime, USA, don't repeat 1953, no Mullah, end quote.

BROWN: And happening now, President Trump says he's considering all options, including possible military action, as Iran's crackdown on protest grows more deadly. A U.S.-based human rights group says more than 500 demonstrators have been killed as the anti-government protests enter their third week. President Trump has warned of striking Iran if the regime kills protestors, and he says Tehran now wants to negotiate with the White House.

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(BEGIN VIDEO CLIP)

TRUMP: Yesterday, Iran called to negotiate. Yesterday, the leaders of Iran called, they want to negotiate. I think they're tired of being beat up by the United States.

Iran wants to negotiate. We may meet with them. I mean, it's a meeting is being set up, but we may have to act because of what's happening before the meeting. But a meeting is being set up. Iran called, they want to negotiate.

(END VIDEO CLIP)

BROWN: So, we are covering all the latest developments. CNN Correspondent Nada Bashir is in London. Nada, where do things stand with the protests today?

NADA BASHIR, CNN CORRESPONDENT: Look, Pam, Iran has been plunged into a total internet communications blackout since late Thursday, making it very difficult to get updates from on the ground in Iran. As we have seen those protests continue to spread across the country, as we understand it, according to eyewitnesses is on the ground and human rights organizations.

Now, these process have spread to every province of Iran, more than 180 towns and cities across the country. But as we know, and as you've mentioned, these protests have also grown deadly. The latest figures coming from the U.S.-based human rights activist news agency put that figure, the death toll of protesters at more than 500 now, and at least 10,000 are believed to have been arrested. Of course, it's very difficult for CNN to independently verify these figures at this stage, but that is coming from a U.S.-based human rights organization. And we have been seeing some video emerging, showing the continued protest over the weekend during this internet blackout, but also, of course, the deadly impact of the violent crackdown by Iran's security forces. We have seen clips outside a forensic medical facility showing black body bags lining the streets, families crying, distressed, trying to identify their loved ones. So, that really gives you just a glimpse into what has occurred over the weekend as we try to get more information.

And, of course, the pressure is mounting now on the Iranian regime. They have certainly responded by calling for pro-regime demonstrations to take place today and have been broadcasting that video over state media.

But as you mentioned, President Trump has said that the U.S. is considering different military options in order to protect protesters, in the words of the U.S president. Of course, as we now, know there is also talk of potential negotiations between the U.S. and Iran.

BROWN: Yes, we'll see what happens.

Nada Bashir, thank you so much. Wolf?

BLITZER: And coming up, Mississippi's oldest synagogue once again forced to rebuild after a fire tore through the building, destroying most of what was inside. What we know about the suspect now set to face state and federal charges.

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BROWN: Happening now, state investigators of Mississippi are trying to figure out why someone burned down a historic synagogue.

BLITZER: The Beth Israel Temple has stood in Jackson, Mississippi, for 166 years. It's the only one in the city and the largest in the state, and this morning, a suspect is under arrest.

CNN's Rafael Romo is joining us right now. Rafael, tell us, first of all, about this attack over the weekend.

RAFAEL ROMO, CNN CORRESPONDENT: Wolf, Pam, good morning. The Jackson Mississippi Fire Department says they got the call about the fire around three on Saturday morning. Fire Investigations Chief Charles Felton said at a news conference that firefighters found smoke and flames at the synagogue when they arrived and had to force their way inside. Officials said it took firefighters almost two hours to get the fire under control.

Beth Israel is Mississippi's largest synagogue and its original location built just after the end of the Civil War was the first Jewish temple built in the state, according to the congregation. It is also Jackson's only synagogue. According to the synagogue's website, in 1967, Beth Israel's temple was bombed by local Ku Klux Klan members in part because of the congregation's work in the Civil Rights Movement.

In a statement to CNN, the Beth Israel congregation said that the cause of the fire has been established as arson and a suspect has been arrested, adding that no one was injured in the fire. That happened in the early morning hours of January 10.

Several local officials have expressed support for the congregation during this difficult moment for its members.

(BEGIN VIDEO CLIP)

DEPUTY CHIEF CLEOTHA SANDERS, JACKSON FIRE DEPARTMENT: We just want to let the Beth Israel community know that the city of Jackson is standing with this community. So, an attack against the synagogue is an attack against all of us.

(END VIDEO CLIP)

ROMO: In a statement, Beth Israel Congregation President Zach Shemper told CNN that, as Jackson's only synagogue, Beth Israel is a beloved institution and it is the fellowship of our neighbors and extended community that will see us through. He also said that we are still assessing the damage to the building, but we will be continuing our worship services and other programs, location to be determined.

I also spoke to former Congregation President Michele Schipper on the phone. She said that several churches have extended kind offers for Beth Israel congregants to use their building as a worship space as they rebuild. She also said that there is significant damage to the library of the temple and near the offices, as well as smoke and ash damage throughout the building.

Now, back to you.

BLITZER: And some of those holy biblical torahs were burnt in the process and completely destroyed, so heartbreaking indeed.

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Rafael Romo, thank you very, very much.

BROWN: Very sad. Well, just ahead --