WSJ What’s News - DOJ Releases Ghislaine Maxwell Interview Transcript

Episode Date: August 22, 2025

P.M. Edition for Aug. 22. The Justice Department has released interview transcripts of Jeffrey Epstein associate Ghislaine Maxwell. And U.S. stocks surged after Fed Chair Jerome Powell signaled rate cuts are coming. WSJ’s chief economic correspondent Nick Timiraos discusses if Powell’s remarks are enough to satisfy President Trump. Plus, if tariffs are driving up prices, why are some retail giants thriving? Sarah Nassauer explains. Sabrina Siddiqui hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

U.S. stocks surge as Fed Chair Jerome Powell opens a path for rate cuts. Plus, how some retail giants are winning in the tariff economy. Retailers say we're seeing the same thing from consumers we've seen for over a year now, which is cautiousness, but you just got a little bit of a hint that for low and middle-income shoppers, that's getting amplified as tariffs raise prices. And the Justice Department has released Epstein, Gilae Maxwell's interview transcripts. It's Friday, August 22nd.

I'm Sabrina Siddiqui for the Wall Street Journal, covering for Alex Osala. This is the PM edition of What's News, the top headlines and business stories that move the world today. Federal Reserve Chair Jerome Powell opened the door for the central bank to cut rates as soon as its meeting next month.

In a widely anticipated speech today, at the Fed's annual meeting in Jackson Hole, knowing, Powell said the Fed faces a challenging situation as tariffs drive up costs while the labor market appears to be softening. While the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers. This unusual situation suggests that downside risks to employment are rising. And if those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment. His comments follow a period of unusually intense pressure on the Fed by President Trump

and his senior advisors who have called on the central bank to aggressively cut interest rates. Nick Timrose, the Wall Street Journal's chief economics correspondent, joins us from Jackson Hole to discuss. Nick, are Powell's remarks enough to satisfy President Trump who's been calling for a rate cut? Well, it doesn't sound like it because Powell was cautious in his remarks. So even though he very clearly blessed market expectations of a rate cut in September, he was careful about suggesting that this would be the beginning of a long string of rate cuts. The way that the Fed would do that would be if the labor market was falling apart. And the President wants a lot more rate cuts.

So it seems like maybe this will buy some of a detente for now, but this is a Fed that it's still going to be careful. given the fact that inflation has been running above their goal for the last four years. What was Powell's assessment of the overall economy and job market? Well, Powell's assessment really for the last six months has been one of. We expect growth to slow and prices to rise as these tariffs filter through supply chains. He said today that's what they've been seeing. Tariffs are now showing up in the form of higher measured inflation.

Goods prices, which were falling last year, are rising now. At the same time, the labor market is looking perhaps a bit weaker than when the Fed had its last policy meeting at the end of July. And that's because we got job growth revision just a few days after that meeting that suggested hiring was much slower in May and June. And he pointed to a sort of odd dynamic in the labor market where you have the supply of workers falling, possibly because of immigration, but also demand, workers falling. And so like a ball rolling downhill, the Fed is worried that slower labor demand could feed on itself and you could see greater weakness in the economy later. Did Powell reference in any way the pressure the Fed has faced from President Trump and his advisors? Hardly. He had sort of a throwaway line that he includes whenever the question of Fed

independence comes up. He said that this Fed does not take anything into account other than what the economic outlook is, what the risks are to the Fed's goals of a stable labor market with low and stable inflation. And he said, we will never deviate from that. Nick Timmeros is chief economics correspondent at the Wall Street Journal. Thank you, Nick. Thanks for having me. U.S. stocks surged today after Powell's remarks, boosting the Dow to its first record closed this year, adding 846 points or 1.9 percent. The S&P 500 snapped a five-session losing streak, ending more than one and a half percent higher.

And the NASDAQ ended up about 1.9%. The Trump administration has released the transcript and audio recordings of a top Justice Department officials interview last month with Gilane Maxwell, the former associate of convicted sex offender Jeffrey Epstein. The release comes as the Trump administration has faced weeks of criticism over its initial refusal to release documents from its investigation into Epstein, which some believed would show links between the disgrace financier and other powerful individuals. Maxwell is currently serving a 20-year prison sentence after she was convicted in 2021 of sex trafficking and other offenses

for facilitating Epstein's sexual abuse of underage teens. She is appealing her sentence to the Supreme Court. Epstein died by suicide in jail in 2019 while awaiting trial on sex trafficking charges. The release of the interview is the latest developments since the Justice Department stirred bipartisan outraged in July by backtracking on a promise to release more material from the Federal Bureau of Investigation's Epstein probe. The Wall Street Journal reported earlier this year that in May, Attorney General Pam Bondi had told President Trump that his name appeared multiple times in files related to Epstein in what officials felt was unverified hearsay about many people, including the president. The White House called the story, quote,

fake news. A famine has taken hold around Gaza City, according to a global body tasked with assessing famine conditions. The announcement marks the first ever such determination in the Middle East and one that puts more pressure on Israel as it prepares to expand the war amid a dire humanitarian situation. Wall Street Journal reporter Margarita Sankady has more. The world's leading hunger monitor called the integrated food security phase classification, IPC, said that the hunger crisis in Gaza now meets

its official criteria for famine. Famine is a technical term to describe the most extreme form of food and security. And it basically depends on three criteria. For famine to be declared, at least 20% of households need to face extreme lack of food, at least 30% of children needs to suffer from acute malnutrition, which is measured looking at the relationship between their height and weight and the circumference of their upper arm and hunger-related deaths. The IPC was created with the job of assessing famine conditions around the world, and since its creation in 2004, famine has only ever been declared in Somalia, in 2011, in South Sudan, in 2017 and 2020 and in Sudan last year.

The Israeli military unit in charge of aid dismissed the IPC assessment in a report of its own. It said the group ignored data it provided in favor of sources it called biased and failed to take into account Israel's recent efforts to address the crisis. In a statement published online, Israeli Prime Minister Benjamin Netanyahu described the IPC report as, quote, an outright lie. Coming up, as tariff-driven price increases hit the shelves, why are some giant retailer still thriving? That's after the break. It seems as though in the tariff economy, the big U.S. retailers who cater to cautious consumers

are winning. Sarah Nassar, the Wall Street Journal's reporter, covering large retailers, joins us now with more. Sarah, you reported that some retailers are thriving in this tariff economy, which ones are doing well and how are they doing it? Yes, we're definitely seen some winners this week with a string of retail earnings. Retailers like Walmart, Amazon, T.J. Max, that really have products and a pitch and a reputation for deals, for lower prices, but also higher value, maybe on something a little bit fancier, but it's a deal, are doing much better right now than the retailers that don't offer that kind of thing as much. And who's falling behind and why? Target reported another quarter of lower sales.

And let's look at Walmart versus Target. Walmart's the country's largest grocer. Everyone needs to buy groceries, or hopefully has enough money to buy some groceries, and they might not buy some other things to be able to afford that. Target does sell groceries, but less. They are more reliant on things that are more wants versus needs. And so we're seeing some of these trends play out pretty clearly. What are some of the changes we're seeing in consumer behavior?

Well, tariffs are starting to trickle through to prices, but that has been pretty muted so far. But we heard Walmart talk about this week that for middle and low income shoppers, they are pulling back a little bit as prices go up on certain products. Overall, retailers say we're seeing the same thing from consumers we've seen for over a year now, which is cautiousness. So there are some things they're not buying or not buying as much of. but you just got a little bit of a hint that for low and middle-income shoppers, that's getting amplified a little bit as tariffs raise prices. How long can companies continue to absorb the cost of tariffs? It's unclear.

They have all said that more price increases are coming. That's in part because of just of the way they brought in product, right? And they're selling through inventory that was already in the U.S. still. That inventory will run out at some point. So it's going to increase. But it remains to be seen exactly how they're going to weather this. far they have been able to offset a lot of those increases by cutting costs elsewhere, sourcing differently. So it's a really big question mark, honestly.

That was the Wall Street Journal's Sarah Nassar. Sarah, thank you. Thanks for having me. Next week, Abercrombie and Fitch The Gap and American Eagle Outfitters are reporting their quarterly earnings. You can hear how apparel retailers are managing tariffs and higher prices this Sunday and WSJ's take on the week. In other news, President Trump said today the government is taking a nearly 10% stake in Intel, capping a two-week frenzy in Washington over the future of the company and fueling speculation about what else might be done to help the troubled chipmaker. Speaking in the Oval Office, Trump said that the company has agreed to give the government

the stake as part of discussions about Intel's future and billions of dollars in grants it has received from the 2022 Chips Act. The Federal Bureau of Investigation rated the Maryland Home and downtown D.C. office of former Trump National Security Advisor John Bolton today escalating a years-old probe into whether the prominent Trump critic mishandled classified information.

That's according to people familiar with the matter. A spokeswoman for Bolton declined to comment. The FBI director, Cash Patel, posted on X around the time of the search, quote, no one is above the law. And according to two defense officials, Defense Secretary Pete Hegseth has authorized the National Guard soldiers in Washington, D.C. to carry weapons. The move marks yet another effort by President Trump to ramp up security in the nation's capital.

And that's what's news for this week. Tomorrow you can look out for our weekly markets wrap up What's News in Markets. Then on Sunday, we'll be discussing how the skyrocketing cost of college is weighing on kids and parents' decisions. That's in What's News Sunday. And we'll be back with our regular show on Monday, morning. Today's show was produced by Pierre Bienname with supervising producer Michael Cosmetus. Michael Lovell wrote our theme music. Aisha al-Muslim is our development producer, Chris Zinsley is our deputy editor. And Philana Patterson is the Wall Street Journal's head of

news audio. I'm Sabrina Siddiqui. Thanks for listening.