Trump says ‘I love the inflation’ as Iran war continues to spike prices

[0:00] President Trump is vowing escalation in Iran, announcing the U.S. will carry out new military [0:05] strikes today as his administration grapples with the economic fallout of the war, with the [0:11] Dow tumbling, and new numbers showing inflation rising to its highest level in three years. [0:16] This morning, in a post on social media, President Trump warned Iran will have to, [0:21] quote, pay the price after taking too long to agree to a peace deal. [0:25] It came after the U.S. and Iran exchanged strikes overnight, after the president accused Iran of [0:30] downing a U.S. Apache helicopter patrolling the Strait of Hormuz, while Tehran accused the U.S. [0:37] of using the crash as a pretext for strikes. From the Oval Office today, NBC's Garrett Haake [0:42] pressed the president about that social media post and what comes next in the war. [0:48] You posted this morning about Iran. You said that they've taken too long to get to a deal, [0:52] and I want to make sure I quote you correctly. You said that now they will have to pay the price. [0:56] What did you mean by that specifically? Well, we're going to be attacking them and attacking [1:00] them very hard. You're resuming bombing? Yeah, well, based on the helicopter, I guess we have [1:05] the right to do that. You know, they shot down a very, very incredible, actually an incredible [1:12] machine, and at first they said they didn't do it, then they admitted they did it. I've been [1:17] working with Iran for a number of months, and they should sign their deal. It's a good deal. [1:27] It doesn't give them the right to have a nuclear weapon. In fact, it totally prohibits [1:32] them from ever having a nuclear weapon. So, so we'll see what happens. But we hit them hard [1:39] yesterday, and we're going to hit them again hard today. [1:42] Now, it comes after my interview with the president on Friday when he drew this new red [1:49] line for renewing military action against Iran. Listen, I want to know what your red line is. [1:56] What would trigger you to restart military action? Would it be Iran killing more American citizens? [2:04] Well, certainly that would be something that I would think about very seriously. But [2:08] my red line would be if I think I wasn't going to make a deal or if I wasn't going to make a deal [2:13] fast enough. So we're having very good negotiations with the people that are leading the country now. [2:18] It's the third group that we've been dealing with, and they are different. And you could say it's [2:24] regime change, actually, because these are very different people. I find them to be [2:28] more rational, very smart. [2:32] Markets closing just moments ago, reacting to the president's threat. The Dow tumbling more than [2:37] 950 points. Meanwhile, new economic numbers show inflation in May, jumping to 4.2 percent from a [2:44] year ago, largely fueled by rising energy costs and fuel prices as transit through the Strait of [2:50] Hormuz remains disrupted. But today, the president once again downplayed those rising prices. Here's [2:55] what he said. Any concern, Mr. President, about the latest inflation number, which came out this [3:01] morning? Could that be it? No, I love it. The numbers were great. When the war is over, it's coming down. [3:07] I know you can't. It's going to come down like a rock. [3:11] Meanwhile, a new poll shows Americans overwhelmingly disapprove of President Trump's handling of [3:16] inflation, the cost of living, and the economy. Joining me now to start us off, our team of NBC [3:22] News reporters, White House correspondent Monica Alba, senior national security correspondent Courtney [3:27] QB, and business and data correspondent Brian Chung. Monica, I have to start with you at the White House [3:33] as we were just discussing President Trump saying the U.S. planning to carry out more [3:38] strikes again today. What exactly can you tell us, Mon? [3:42] Yeah, I mean, this is a president who is telegraphing what he wants his military to continue to do here. [3:47] We saw a little bit of a preview of that yesterday. But it's the president stressing that because of the [3:52] downing of that Apache helicopter, that he argues the U.S. has no real option here but to respond. [3:59] The question is, how forcefully will he respond? And does this mean that this is a restarting of major combat [4:06] military operations? Which, remember, the president has not taken that off the table. He has said that [4:10] that is possible throughout the course of this pretty shaky ceasefire. But it's unclear if that's [4:15] what he means or whether these are going to be continued targeted strikes like what we have seen [4:19] in recent days. Because, again, even though there is technically this fragile ceasefire, the U.S. and Iran [4:25] have been trading and continue to trade some of those strikes back and forth, especially over the last [4:31] couple of days. So when he was asked specifically by our colleague Garrett Haake whether that did mean [4:35] to resume the bombing, the president indicated yes. But, again, we don't know if this is going to be [4:40] the sort of start of another large barrage or continuation. But it really comes, Kristen, as the [4:46] president is saying kind of on the other hand that he still feels a peace deal could be imminent, could be [4:50] coming in the next couple of days, as he continued to stress to you in your interview as well. [4:55] So where the reality exists between those two very different things is still a very open question. [5:00] It is. You raised such a seminal point, Monica. Just how close are they to getting a deal? Courtney, [5:06] let me turn to you. Pick up where Monica left off because she talked about this open question. Could [5:11] this be a large barrage of attacks that we see today? Or will it be similar to what happened [5:18] overnight? What are you watching for? What are your sources telling you? So we have seen a pattern [5:23] between how the U.S. and Iran have been retaliating, responding, whatever you want to say here over the [5:28] last several weeks. The U.S. has been taking strikes primarily along the Strait of Hormuz and even [5:33] inside the Strait of Hormuz on an island, Kashm Island in there. They hit the coastal radar sites, [5:37] air defense systems. They hit the kinds of locations where the Iranians may be firing off drones or in [5:42] some case surface to air missiles to try to stop them from doing so in the future. That's how they [5:46] justify these as self-defense strikes. So I would suspect that would be the same kind of thing that we [5:51] would see going forward. But we don't know. We don't have any real specificity that we can say on that [5:56] right now. I would suspect that, though. Iran has been firing back, launching out at U.S. allies in [6:02] the region and specifically trying to target U.S. personnel on bases, whether it's U.S. bases or even [6:07] bases that are owned by the host country where U.S. personnel are sometimes housed. The majority of [6:12] those have been have been shot down, though. I think a lot of people are wondering, Courtney, [6:16] what we are witnessing, what happened overnight. Is it already in escalation? How are people within the [6:22] Pentagon viewing this? So, I mean, the one thing that has definitely escalated is it's a shorter [6:26] time frame between the sort of escalation ladder of little activities that are occurring and then [6:31] that leads to strikes from both sides. That time frame is it keeps shrinking. But not just that. Iran, [6:38] one difference from last night, Iran fired on three different countries. It was a large number of [6:44] number of missiles and drones, one of the biggest ones that we've seen of the ceasefire. [6:47] The U.S. struck 20 different targets as part of this yesterday. That's larger than what we've [6:53] been seeing. It's usually been two or three maybe locations. So in that way, yes, this is escalating. [6:58] The way that it's not escalating, though, is exactly what Monica was just talking about, [7:02] the idea of major combat operations back inside Iran. We still haven't seen it [7:05] move into that area. This is still really focused on what's going on inside the Strait of Hormuz. [7:10] Okay. Well, I know you're going to be watching it very closely. Court, stick around. Monica, [7:13] let me just go back to you because President Trump said something else that I think got a lot of [7:19] attention today. He announced what he's calling a secret mission to secure more oil. What exactly [7:26] does that mean? Could it potentially bring prices down? Yeah, that language certainly did raise a lot [7:32] of eyebrows, Kristen, when the president said he was able to basically tell reporters in the world about [7:37] it now because Iran had kind of figured it out. He implied that basically some of the military assets [7:43] that have been in place in this naval blockade and in the region have helped some tankers and [7:48] some vessels be able to transit through the Strait of Hormuz that the president argues has contributed [7:53] to a bit of a dip in gas prices that we have seen in recent days because, he says, it allowed 100 [8:00] million barrels of oil to enter the open market. But we have some questions about exactly what this was. [8:07] What he calls a secret mission maybe is actually something that we sort of did know [8:10] was going on or something that certainly had been an effort behind the scenes because we know that [8:15] the administration had continued to tell us they were trying to do that to get more through, [8:19] but that maybe they weren't being as public about their role in it. So this was something that was [8:23] a bit of a surprise. It does seem like it perhaps could have had a little bit of an impact, but we [8:28] should point out, Kristen, that those prices at the pump are still much higher than they were [8:32] before the war began. Yeah, it's a really good point. And I'm going to come back to you on the [8:36] broader economy in just a moment, Monica. But Courtney, let me have you weigh in on this [8:40] secret mission. What are your sources telling you about that? It's not so secret. It is true. [8:46] The U.S. military, I mean, basically what we should look at this is the military is helping [8:49] sort of coordinate with some of these shipping companies so that some of the ships can get not [8:53] only out of the Strait of Hormuz but back in to get more oil. There have been more than 200 transits [8:58] throughout that, not necessarily 200 ships, but transits back and forth through the Strait of Hormuz [9:02] over the course of the last month or so, according to a U.S. official. Basically what the U.S. is [9:06] doing here is they're saying, look, here is the safest passageway through the Strait of Hormuz. [9:10] While you're going along there, stay in communication with us. If you see that you're getting [9:15] any threats, attacks from drones, whatever it is, we're really close to you. We're right nearby. [9:21] The U.S. has been shooting down incoming drones and projectiles that have been launched by the [9:26] Iranians. So they are protecting commercial shipping. It's just not as at the same level of [9:32] Project Freedom, which lasted just a couple of days several weeks ago. It's a slightly scaled [9:37] back version of that. And it's more about coordinating than it is about actually protecting. [9:42] All right. Courtney Kuby, thank you so much for helping to start us off today and all of your [9:46] great reporting, including overnight. We really appreciate it. Monica, let me turn back to you. [9:50] You just talked about gas prices. You know, it was so notable because we got this new inflation [9:56] figure today, which shows that it did, in fact, increase yet again. But the president is downplaying [10:02] the latest inflation numbers. What exactly did he say, Monica? Yeah, he said something that also [10:07] may be seized upon by Democrats and critics in the coming months, which was, quote, [10:12] I love the inflation because he argues it means that when this conflict, in his view, is over, [10:18] the prices will come crashing down. That's an argument we have heard the Trump administration and the [10:22] White House make repeatedly when it comes to gas prices, when it comes to some of these other higher [10:26] costs. But it's not something that we have seen overall. But it just sort of is an interesting [10:30] point from the president, who really has leaned into this, kind of trying to dismiss the idea [10:35] of affordability concerns. Remember that when he was asked whether he thinks about Americans' [10:40] financial situations when factored into his decision-making about the war in Iran, he said and [10:45] doubled down and tripled down that he doesn't think about it at all, that it doesn't factor into that. [10:51] So this is sort of a part of the president's own view on this, but that does certainly kind of [10:55] dismiss some of these concerns that we have seen that are really raised at the very top, [11:00] if not the top of the list, when voters are asked what they care most about and likely will continue [11:05] to be asked about as we get closer to the midterms. And those are these issues of affordability [11:09] and high costs. Kristen. All right. Monica Alba covering all the angles for us from the White House. [11:15] Monica, thank you so much. Really appreciate it. Brian Chung, let me turn to you now. Again, [11:19] as we reported at the top of the program, we did see markets drop today. Give us your insight into [11:27] why that is happening and the latest inflation report. Yeah, Kristen, as you can see on that [11:31] screen, the market's ending the day down one and a half percent, two percent in some cases. Some of [11:35] that is the malaise on tech stocks. A lot of that is the Iran war developments, but also this inflation [11:40] report, which showed prices rising by 4.2 percent between May of this year and May of last year. Not [11:45] only is that higher than 3.8 percent we saw in April, but it's also the highest number that we've [11:50] seen on this print since April of 2023, over three years ago. Now, I think this is the more worrying [11:56] thing that's certainly going to make that affordability problem that Monica just talked [12:00] about even worse, and that is negative real wage growth. Again, this is basically a measure of [12:05] adjusting your income for inflation because inflation is now in its second consecutive month [12:11] of being higher than the rate of wage increases. That means that Americans are likely having to tap [12:16] into their savings because the price tags at the store are rising at a faster pace than your actual [12:21] income. And a lot of that is, of course, because of higher energy costs, gas prices well above $4 a [12:26] gallon. It was sub $3 a gallon before this war began, but again, up 23 percent compared to a year ago. [12:32] Food costs are also up over 3 percent. So these are all things that are weighing on Americans and also [12:37] going to weigh likely on the Federal Reserve, where their expectation is that they're not going to cut [12:41] rates or move interest rates in their next meeting next week. But later on down the year, you now have [12:45] markets pricing in a good chance they could hike interest rates. That would be certainly unwelcome news [12:49] to the president. So let me follow up with you on that point, because I asked President Trump about [12:53] that specifically. Is he concerned that they could, in fact, hike interest rates? He was very clear [12:59] he was not a fan of that. Walk me through what the Fed is grappling with right now. And again, as you say, [13:06] they're going to meet next week. Yeah. And Kevin Warsh is going to be in between the rock of this [13:10] economy and the hard place that is the president obviously calling for lower interest rates, as he [13:15] told you in that interview over the weekend. Now, again, what the Fed is going to be really focused [13:20] on is right here, this particular chart on real wage growth. This is a major red flag for the economy. [13:25] You do not want inflation eroding at your income. For that reason, generally, when you see this type [13:32] of dynamic and inflation going up, the Federal Reserve will respond by hiking interest rates. Again, [13:37] that is exactly the opposite of what the president wants. He has said and reiterated in your interview [13:42] that he will be independent in terms of allowing Federal Reserve Chair Kevin Warsh to do his thing. [13:47] His first meeting is going to be next week. How does the incoming Fed chair thread that needle? I think [13:51] what was also interesting, the president told you he's living with Kevin. So it does seem like he's [13:56] willing to let him do his own thing. But what types of true social posts could we see if the Fed chair [14:02] does not lower interest rates, but even later on down the line hikes them? We'll have to see. [14:06] Yeah, I think that is the key question. Brian Chong, thank you so much for joining us. Really appreciate it. [14:11] We thank you for watching. And remember, stay updated on breaking news and top stories on the NBC News app [14:17] or watch live on our YouTube channel.