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Trump Rips Fed for Raising Interest Rates; DNI Coats Surprised by Trump's Invitation to Putin; Michael Cohen Recorded Trump Discussion on Paying "Playboy" Model. Aired 11:30a-12n ET

Aired July 20, 2018 - 11:30   ET

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


(COMMERCIAL BREAK)

[11:30:06] KATE BOLDUAN, CNN ANCHOR: "He is a good guy but" -- whatever follows that is never a good thing when it's coming from your boss. That's what Federal Reserve Chairman Jerome Powell is facing this morning. Breaking with decades of presidential tradition,, President Trump is publicly weighing in and criticizing an action taken by the Federal Reserve. Listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I put a very good man in the Fed. I don't necessarily agree with it, because he is raising interest rates. I'm not saying that I agree with it. I don't -

(CROSSTALK)

TRUMP: I must tell you, I don't I'm not thrilled. Because we go up, and every time you go up, they want to raise rates again. I don't really -- I am not happy about it. But at the same time, I'm letting them do what they feel is best.

(END VIDEO CLIP)

BOLDUAN: The president didn't stop there, continuing his complete break from well-established White House policy, taking to Twitter to criticize the Fed this morning. In one bit saying, "The U.S. is raising rates while the dollar getting stronger and stronger with each passing day, taking away our competitive edge." Also Saying, "Debt coming due and we are raising rates, really?"

Now what?

Joining me now, Stephen Moore, CNN senor economics analyst and former Trump economic adviser.

Great to see you, Stephen.

STEPHEN MOORE, CNN SENIOR ECONOMIC ANALYST: Hi, Kate.

BOLDUAN: For decades, it is well established a president does not comment basically on the Fed or Fed actions out of respect for their independence? Does this concern you, what you heard from President Trump? MOORE: Look, let me correct you on that. I've followed this for a

long, long time, for over 30 years. It is not true that presidents don't try to intervene in Fed policy. I'm not saying this approvingly. We know going back to Richard Nixon that presidents always try to get the Fed to ease up and to keep low interest rates to help the economy, especially in election times. This is nothing new, the kind of trying to bully the independence of the Fed. I do believe, by the way --

(CROSSTALK)

BOLDUAN: Wait, wait. You are not cool with this? Are you cool with this?

MOORE: I don't think it's a good idea. I'm saying it happens. This is the nature of politics. Every president wants low interest rates because they want more jobs and the economy to boom. Incidentally, we just got a new economic statistic out this morning, Kate, that unemployment insurance claims are now as low as they have been since the Beatles were playing back in 1969. The economy is just booming right now. You have the kind of best of all worlds in this economy. You have low unemployment, high growth and low unemployment.

I have talked to Donald Trump about this issue about Fed policy.

BOLDUAN: OK.

MOORE: He and I had a lot of discussions about this. He believes -- think about this, Kate. How did Donald Trump make his money? He is a real estate guy. He does real estate investing. Real estate people love low interest rates, right.

BOLDUAN: Of course.

MOORE; He looks at the world in that prism of trying to keep rates low. I happen to think the Fed is --

(CROSSTALK)

BOLDUAN: Doesn't your prism change when you become president? It's not day one of his presidencies, Steve.

MOORE: As I said, he said he likes Powell, who is the chairman of the Federal Reserve, is independent. I don't think he is going to influence his decisions by -- based on what Donald Trump said. Incidentally, you could make the case that Trump is right. I don't see a lot of inflation out there right now in the economy. You go to the stores, gas prices have risen a little bit in recent times. We don't see raging inflation. Trump's point -- and there's something to this -- is, why try to snuff out this growing economy with low inflation by raising interest rates? And if rates go up, that might make it more expensive for the federal government to borrow. As you know, the biggest borrower in the world today is the U.S. federal government. That will make the deficit situation worse.

BOLDUAN: I will say -- I will say, I will admit one thing. I have not made it a practice of tracking every statement about the Federal Reserve actions that every president has made in presidential history.

MOORE: Right.

BOLDUAN: But beyond Nixon, in recent memory, this is not normal. Can we establish that? This is not normal, with the president coming out like this?

MOORE: Kate, let me put it like this. You're right that it's very -- it's not normal that a president would publicly go after the Fed. But I do know this. Presidents privately try to nudge the Fed in the direction of lower interest rates. No president wants to see rates go up to try to snuff out the economy. I think the difference between this president and past presidents is, President Trump is doing -- saying these things publicly, whereas most presidents --

(CROSSTALK)

BOLDUAN: Which I think is a big difference. I think it's a big difference I think that is a big difference coming out publicly and saying it. Let me put it this way, Larry Summers came out with a tweet. He was Obama's economic adviser. He says that he thinks this forces the Fed's hands. He tweeted, "It will likely result of presidential intervention is higher rates as Fed needs to assert its independence." Do you see that?

[11:35:07] MOORE: I hope not. Look, Larry Summers was the chief economist for Obama. Obama never got us anywhere near 3 percent growth. We have Trump in. My point is --

(CROSSTALK)

BOLDUAN: You are saying, don't listen to anything Larry Summers says?

MOORE: When it comes to the economy, you have 4.5 percent growth, lowest unemployment rate virtually in 30, 40 years, low inflation. Whatever Trump is doing on the economy, it is working. We have these tremendous conditions right now. As I mentioned, the new unemployment came out today. They are positive. All these -- my point is, all these people like Larry Summers have second-guessed everything Donald Trump has done and, yet, you look at the results so far, and it's hard to argue this guy hasn't been a good custodian of our economy. Would you accept that notion? OK, so --

BOLDUAN: Stephen Moore, I accept everything today.

MOORE: You and I agree on this. The Fed should be independent. The president, Congress, should not be intervening in what they are doing. The Fed does make mistakes though.

(CROSSTALK)

BOLDUAN: It's that this is not the first time that the president has broken from a norm, if we want to say it that way. He tweeted about the unemployment numbers before they came out. We can go through a list of things. I just wonder -- I don't have time to run the sound bite. In the CNBC interview, Stephen, he even acknowledges that he wasn't supposed to be doing it. He is saying, I'm saying something -- somebody will say, oh, maybe you shouldn't say that. He says, I couldn't care less that they say that. But he should care.

MOORE: The Fed is independent. I don't believe the president can fire the chairman of the Federal Reserve. I should look that up.

(CROSSTALK)

BOLDUAN: I did check, There's a way, apparently, for cause.

MOORE: OK.

BOLDUAN: Your definition of for cause and the president's of for cause might be slightly different.

MOORE: Kate, one thing that presidents normally do is the people that they select to be the chairman of the Federal Reserve are people who agree with their economic positions. Look, Trump --

(CROSSTALK)

BOLDUAN: Do you think Powell doesn't?

MOORE: I think he does. There's an honest disagreement right now among economists about whether the Fed should be raising interest rates. I think -- my opinion is it's a close call, one way of the other. Trump is a real estate guy. He loves low interest rates. He wants to keep those rates low. You look at the inflation rate right now, it's hard to say there's a compelling case for higher interest rates.

BOLDUAN: I'm an independence guy. I land on the independent side of things.

Great to see you, Stephen.

MOORE: You do a lot of shopping, Kate. When you go out and shop, are you finding prices are rising dramatically for things? I mean, you go to Walmart today, you don't see the prices higher.

(CROSSTALK)

BOLDUAN: You know where I see prices rise? Dairy and other --

MOORE: Yes.

BOLDUAN: -- and other commodities that are being hit by tariffs.

MOORE: And gas.

(CROSSTALK)

MOORE: And gas at the top. That's true.

BOLDUAN: Good to see you, Stephen.

MOORE: You have to look at cellphones, technology, those are going down in price. So you know -

(CROSSTALK)

BOLDUAN: I see what we're doing next time. We're going to go shopping. Our next interview is going shopping for something. We will see.

MOORE: Let's do it.

BOLDUAN: Your idea of shopping and mine might be slightly different.

MOORE: We will go to Walmart. That's where prices are low.

BOLDUAN: The best Super Walmart in is my hometown, I'm just saying.

Thanks, Stephen.

It was a jaw-dropping moment. The U.S. spy chief flabbergasted on stage about an invitation for Putin to visit the White House. Why didn't he know. Why wasn't he given a heads-up before the announcement. What does it say about the state of affairs in the administration? Does it mean anything for Dan Coats' future? I have nothing but questions. We will find out next.

(COMMERCIAL BREAK)

[11:43:17] BOLDUAN: One side is mad, the other side is charging pure incompetence. It's not a marital spat. It's the current relationship status between the White House and it appears the director of National Intelligence. CNN is reporting that DNI Coats was caught completely by surprise when the White House announced an invitation to Vladimir Putin while Coats was in the middle of a live interview. No one knows what's going on but Coats felt it was important to defend the work of the Intelligence Community. Another day in the Trump White House or is this some new uncharted territory?

Here with me now, host of CNN's "AXE FILES" and the former senior adviser to President Obama, David Axelrod.

Great to see you, David.

DAVID AXELROD, CNN HOST, "AXE FILES": Good to see you.

(CROSSTALK)

AXELROD: It's all uncharted territory. Let's stipulate that.

BOLDUAN: It all is. It's another day.

Where do you land then on what happened this week?

AXELROD: Well, look, I mean, you know -- I think anyone who has served in a White House and close to a president would have been appalled by what they saw, because the idea of a president being alone for two hours with Vladimir Putin, apparently not well prepared, Putin being a master manipulator, no record of what happened and apparently no record for or no knowledge of the people around him, his national security advisers, of what happened in that room. That's really frightening. Vladimir Putin has all the cards. That doesn't even get to the press conference itself and the signals that were sent at that press conference, which were incredibly weak. And then the changing stories all week long. It has just been a fiasco. Of course, the cherry on the cake is for all of this, Vladimir Putin gets an invitation to the White House. Really extraordinary.

[11:45:11] BOLDUAN: When it comes to the invitation and the rollout of the invitation, David, what kind of coordination when you were at the White House went into something like that? The fact that Coats was caught off guard and this happened in the middle of the interview with Andrea Mitchell, what did you think when you saw that?

AXELROD: Look, as I said at the beginning, this is all uncharted territory. It flows from the fact that Donald Trump believes singularly in Donald Trump. He believes that he can go into a room with a hardened dictator, former spy like Putin, and somehow charm him. He feels like he can get in a room with Kim Jong-Un and turn around generations of bad practices and ill intentions and so on. He doesn't rely on the people around him and his national security team is left in the dark. No White House operated like that. Certainly, the one I worked in, didn't operate like that. There was consultation between the national security staff and the president, the president and the national security staff and the Intelligence Community, the State Department, the Defense Department and all of these moves were choreographed. They weren't audibles called by the president of the United States. But he is running the country like he ran his business. When it comes to issues like this, you know, it's incredibly weak. It puts us in a dangerous position.

BOLDUAN: Let me play for you then what President Trump said in the CNBC interview about President Obama and his posture towards Russia. Listen to this, David.

(BEGIN VIDEO CLIP)

TRUMP: Look at all of the things that I have done -- nobody else did what I've done. Obama didn't do it. Obama was a patsy for Russia. He was a total patsy. Look at the statement he made when he thought the mics were turned off. OK? The stupid statement he made. Nobody does a big deal about that.

(END VIDEO CLIP)

BOLDUAN: What do you think?

AXELROD: I mean, it's his go-to play whenever he is in jam, he talks about Obama, he talks about Hillary. I remember when Putin pushed into Crimea, it was Obama who rallied the allies, European allies to join the U.S. in some win withering sanctions on Russia that crippled the Russian economy. I don't really know what he is talking about. I am not sure he knows what he is talking about. I think that for his base, the thing to do is go back to Obama or go back to Clinton. You know, in fairness, you saw the polling, 79 percent in one poll, 68 percent in another, Republicans approve of what he did in Helsinki. Perhaps he thinks this is an effective tactic and that's why he doubled down on his invitation -- with his invitation to Putin.

(END VIDEO CLIP)

BOLDUAN: I don't want to run out of time. I want to get to a really interesting guest you have on the "AXE FILES" this week, the very newly former mayor of New Orleans, Mitch Landrieu.

AXELROD: Exactly.

BOLDUAN: Let's play a bit for our viewers.

(BEGIN VIDEO CLIP)

MITCH LANDRIEU, FORMER NEW ORLEANS MAYOR: I'm not interested in figuring it out anymore. President Trump has us all spinning around in circles trying to figure out why does he what he does. We need to focus on what his behavior is and what his decisions are and ask whether it makes America stronger or weaker. I think that he weakened us in a way that we have never been weakened before. He should be ashamed of himself for the way he handled. More importantly, putting that issue aside, we need to figure out how to work around him as a country and how to contain him.

AXELROD: Hard to work around a president.

LANDRIEU: But, actually, it's not impossible. It's possible for the speaker of the House to grow some courage and to start checking the president's power. There are lots of different ways we can do that.

(END VIDEO CLIP)

BOLDUAN: I thought your question was spot on, David, which is, it's hard to work around a president. They are seeing that play out in real fashion.

AXELROD: Yes.

BOLDUAN: What do you -- what do you think Mitch Landrieu's place is in this big conversation amongst Democrats going forward?

AXELROD: You know, I went down to see him. He has been mentioned by many people as a potential presidential candidate. He carries himself very, very well. You can see that he has a presence about him. He speaks in an idiom that people can easily access. He has a lot of great tools.

What he doesn't have or what he didn't express in this show was the fire in the belly to do it. He kind of embraced another candidate for president. I won't tell you who, because I want you to watch --

BOLDUAN: Oh, come on, David.

[11:50:57] AXELROD: -- the show.

But I'm not sure that we're done with Landrieu. There may be another turn of the wheel with him and he may end up in this picture. Because he did get a lot of plaudits for how he handled the monument issue in New Orleans and the issue of race, which is generally at the core of what divides our country. So I think he's a formidable person and someone to keep an eye on.

BOLDUAN: David, it's great to see you. Thanks so much.

Got to get to some breaking news right now.

AXELROD: OK, Kate. Thank you.

BOLDUAN: See you very soon.

ANNOUCER: This is CNN breaking news.

BOLDUAN: All right, everyone, this is just handed to me, some breaking news with some reporting from the "New York Times" about Michael Cohen, Donald Trump's long-time ally, his former personal attorney.

Let me bring in M.J. Lee. She has all the details.

M.J., what do you have?

M.J. LEE, CNN REPORTER: Kate, the "New York Times" is just reporting that Michael Cohen secretly recorded a conversation he had with Donald Trump just two months before the presidential election, and that the two men in this phone conversation discussed payments to a former "Playboy" model who said that she had an affair with Donald Trump. Now this is Karen McDougal, who previously said she had a 10-month long affair with Donald Trump a while ago. This is something that "New York Times" is reporting as part of the raid that the FBI made on Michael Cohen's home, office and hotel room. We already know they had taken lots and lots of documents and recordings. Now again, we're learning that one of those recordings is a phone conversation that Michael Cohen had with Donald Trump explicitly discussing payments to a former "Playboy" model.

Now what is really interesting and important in this breaking news story is that Rudy Giuliani, Donald Trump's lawyer is confirming on the record that this telephone conversation happened and that Donald Trump did, in fact, discuss the payments with Michael Cohen on the tape. But he also says this. Let me just read what Giuliani said to "The Times." He says, "Nothing in that conversation suggests that he had any knowledge of it in advance." He also said, "In the big scheme of things, it's powerful, exculpatory evidence." This is what Rudy Giuliani is saying on the record.

I want to emphasize here, this is a very important story and a big deal story. It dismantles this narrative that's been going on for a while that Michael Cohen has tried to put out there that he acted on his own.

The White House has been saying this, has been trying to distance themselves, and Donald Trump, the president himself, from his former lawyer, and really saying, you know, he acted alone in a lot of these things, as he was acting as sort of the fixer for Donald Trump for many years. And now the stakes for this Michael Cohen investigation, the criminal investigation that's happening in New York right now, the stakes have just gotten 100 times higher. And the answer that we have been wondering -- the question that we have been wondering about for a while, I should say, does Michael Cohen has incriminating information on Donald Trump. The answer really appears to be yes, at least in this one instance.

One of the recordings that was taken by the FBI is of Michael Cohen discussing this very sensitive issue of payments to a former "Playboy" model with the president.

BOLDUAN: I find this fascinating when you read what Rudy Giuliani told the "New York Times" when he said that, "Nothing in the conversation suggests that he had any knowledge of it in advance. In the big scheme of things, it's powerful exculpatory evidence," M.J. I'm having a hard time squaring that.

LEE: Right. And at this point in time, it's difficult to believe that Rudy Giuliani would, once again, say that this is an example where Donald Trump didn't know about this in advance. Remember, this is his line, has been his line regarding Stormy Daniels as well, another woman who has claimed to have had an affair with Donald Trump. Remember, Rudy Giuliani made a lot of news earlier this year when he acknowledged that Donald Trump personally paid back Michael Cohen. And then he went on to say, look, at the time, he didn't know about the payment, but he eventually found out. Of course, Donald Trump himself has denied this affair and he also said he didn't know about the payment at the time, but he eventually found out. But then they said the payment was made in the form of an ongoing retainer to Michael Cohen.

This is just a very big deal and makes it very difficult for Donald Trump and Trump's White House to continue distancing themselves from Michael Cohen and continuing to put out this narrative that Cohen was always working on his own when clearly there were conversations that were being had between Michael Cohen and Donald Trump in which they talk about these payments. We know that there were efforts to try to kill unflattering stories throughout the election and this is just going to be the tip of the iceberg -- Kate?

[11:54:57] BOLDUAN: And one of the most important things here with this is the timing, timing of the payment, timing of the conversation, specifically, right? If everyone can remember, because a lot of what we have talked about is the issue or Stormy Daniels and that payment, but this is another model, Karen McDougal, who says she had a long- time affair with Donald Trump and this gets to the story of "The National Enquirer" paying her in the final stages of the election as well.

LEE: You bring up "The National Enquirer" which is at the center of many of these scandals. Just remember that David Pecker, the publisher of AMI, this is the parent company of "The National Enquirer." As we have been reporting for a long time, he has a very close relationship with Donald Trump, and a lot of information has been coming out in the past couple of months in revealing that Donald Trump could approve stories or not approve stories that are weighing in on stores that involve him. So this leads you to believe that if there were other stories that AMI has been trying to catch and kill, it makes you wonder. We know that Michael Cohen, this has been described as a relationship in which Michael Cohen had the David Pecker account that during the election, any story that went through "The National Enquirer" or any AMI publication, if that's what Michael Cohen handled, then what kind of other recordings are there? Are there other recordings in which Michael Cohen with Donald Trump or somebody else is discussing these kinds of payments that were made or that they were trying to make to women or other individuals who had potentially damaging stories about Donald Trump.

BOLDUAN: Real quick, M.J., just to make sure I have this right. Do we know, does the "New York Times" say that this recording is one of the things that came up with from the sweep up from the FBI?

LEE: The "New York Times" does say that this was one of the things that was seized by the FBI as a part of the raid. And again, just to emphasize this one more time, many, many things were taken as part of that raid, this is just one piece of it -- Kate?

BOLDUAN: Absolutely.

M.J., stick with me. I know you've got a lot of reporting going on.

But jumping on the phone with me is former federal prosecutor, CNN legal analyst, Renato Mariotti, on phone with me.

Renato, can you hear me?

RENATO MARIOTTI, CNN LEGAL ANALYST (via telephone): I sure can.

BOLDUAN: What is your reaction to this story from the "New York Times"?

MARIOTTI: Its' very significant. Federal prosecutors are investigating Michael Cohen for a variety of crimes related to these payments, campaign violations, and potential bank fraud. And it is never a good thing when you are talking to someone about a matter under which they are funder federal investigation. Here we have the president of the United States having conversations with Michael Cohen about a matter that is the subject of a federal criminal investigation. That's significant because one of the -- you don't commit crimes nearly by being associated with somebody, you need to have knowledge and be involved in the criminal activity. Now this, as described in the "New York Times" article, this recording doesn't suggest that the president has that level of knowledge, but it does show that he knew of the transaction, he was involved and you know the question at this point is what other recordings and what other evidence is there involving his knowledge of these kinds of payments.

BOLDUAN: What other questions do you have for Donald Trump and Rudy Giuliani?

MARIOTTI: Well, one question would be, what specifically did the president know about these payments? What did he know about where the money was coming from? What did he know about how the payments were going to be reported if or not reported to the federal election commission? And what -- you know, what -- does he know anything or was he involved at all in how the money was obtained? Because Michael Cohen claimed at one point -- now there's au e's all sorts of stories that keep changing from the president about these payments. But at one point, Cohen, for example, said he got a mortgage and used that money to make the -- or home equity line of credit, I believe, to make the payment to one of the women in question. And, you know, they are -- he would be making representations to a bank, and if you make false representations to a financial institution, that's a federal crime. So it's really down to what the president's knowledge was, what exactly he knew and at what time.

BOLDUAN: Again, of course, timing here is really key, because from the "New York Times" reporting that Michael Cohen secretly recorded the conversation with President Trump two months before the election, and the "Wall Street Journal" reveals the payment before the election, and at that time, Hope Hicks, for the campaign, said, "We have no knowledge of any of this." So this - a lot more breaking news ---