President Trump touts historically low level of African American unemployment

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President Trump touts historically low level of African American unemployment

Reaction from Fox News political analyst Gianno Caldwell on 'Your World.'

This is a rush transcript from "Your World," July 30, 2019. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Thank you, Shepard, very, very much.

We have two big events we're following, and they occur over the next two days, today and tomorrow.

On the left of your screen, Detroit, of course, where the Democratic presidential candidates will be meeting in day one of that event, and on the right the screen, the U.S. Federal Reserve, which will decide the course of interest rates and perhaps by tomorrow at this time the first cut in interest rates in the better part of a decade.

And we are weighing which is going to matter to you more with John Roberts at the White House, following what the president thinks of that ongoing Fed meeting, and Hillary Vaughn in Detroit with the candidates who want to succeed that president and start their own meetings.

We begin with John.

Hey, John.

JOHN ROBERTS, CHIEF WHITE HOUSE CORRESPONDENT: Neil, good afternoon to you.

The Fed expected to cut interest rates for the first time since the collapse of the late 2-aughts. Tomorrow, a quarter-point dropping in the Fed Funds Rate is expected, but the big question is, will Jerome Powell continue to cut interest rates or will tomorrow's cut be it?

The president has created -- his criticized Powell and complained long and loud that he raised interest rates too quickly last year, which has put the United States at a competitive disadvantage by causing an overvalued dollar.

The president says the United States can weather the current environment, but that he wants more cuts. Listen here.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT: Fortunately, I have made the economy so strong, that nothing's going to stop us. But the Fed could have made it a lot easier.

I would like to see a large cut. And I would like to see immediately the quantitative tightening stop. It should be stopped.

(END VIDEO CLIP)

ROBERTS: Yes, the president complaining about Powell's program of quantitative tightening, saying, if Powell had followed the same monetary policy as during the Obama administration, the Dow could be 10,000 points higher than it is right now, which led our Blake Burman to ask the president today whether it was a mistake to not leave Fed Chairman Janet Yellen in place.

Listen to the president.

(BEGIN VIDEO CLIP)

TRUMP: I don't talk about that. I just -- I'm very disappointed in the Fed. I think they acted too quickly by far. And I think I have been proven right. People have said I was right. They were wrong.

The Fed is often wrong. The Fed is often wrong.

(END VIDEO CLIP)

ROBERTS: So, Neil, a quarter-of-a-point to cut expected tomorrow.

The big news, though, will be made in Jerome Powell's accompanying statement. Will he be leaning toward more cuts in the future? That could give the Dow a little bit of energy tomorrow.

The White House also pushing back hard against a new law that was signed by California Governor Gavin Newsom today, which will require presidential candidates to release five years of income tax returns in order to qualify for the 2020 California primary.

In a statement today, the president's outside attorney Jay Sekulow saying: "The state of California's attempt to circumvent the Constitution will be answered in court."

And it's not just the president that this could affect. Some of the other candidates might not be able to release five years of tax returns either. So we will see where this goes -- Neil.

CAVUTO: All right, John Roberts, thank you down at the White House.

Now to the men and women who want to make their way to the White House. One of the 20 debating over the next couple of days hope to be that person.

Now to Hillary Vaughn in Detroit, where night one of the debate kicks off.

Hey, Hillary.

HILLARY VAUGHN, CORRESPONDENT: Hey, Neil.

Well, this debate stage tonight will put prominent progressives Senator Bernie Sanders and Senator Elizabeth Warren in a head-to-head matchup for the very first time, but it will also put a target on their back over Medicare for all.

Congressman Tim Ryan will be on that stage with them tonight. He already teed up an Attack against the idea moments ago.

(BEGIN VIDEO CLIP)

REP. TIM RYAN, D-OH, PRESIDENTIAL CANDIDATE: Well, I mean, I don't think you can square taking private insurance away. That's -- that's a big problem. You can be for universal coverage, a public option, figuring out how to make that happen.

But you get into the business of taking people's private insurance away from them, it's bad policy, because a lot of union members have already negotiated these contracts, gave up wages in order to get the good health care.

(END VIDEO CLIP)

VAUGHN: 2020 contenders have been running around Detroit testing out debate lines with their staff in debate prep, but also warming up talking points to target audiences.

Sanders yesterday took a break from debate prep to meet with rapper Cardi B. Sanders and Cardi had a 30-minute conversation at a nail bar in downtown Detroit. Warren arrived in Detroit today and stopped by to check out the stage.

But other candidates flanking Sanders and Warren have a lot at stake tonight looking for a breakthrough. One of those is Beto O'Rourke, who was spotted running around Detroit earlier this morning. Beto, in a frank fund-raising e-mail supporters today, admits a lot is on the line for him tonight, writing this -- quote -- "It can be a challenge to talk in 30- second snippets about issues that deserve a lot more time. A lot of eyes are going to be on us, from the viewers in homes across the country, to the reporters wondering how our campaign will fare in the months to come."

Also looking for a moment of momentum, Mayor Pete Buttigieg, who's facing trouble convincing black voters to support him. A new Quinnipiac poll out yesterday has him polling close to zero percent among African-American voters.

But the president today weighing in on who he thinks actually has a shot at the nomination.

(BEGIN VIDEO CLIP)

TRUMP: I think, right now, it will be sleepy Joe, I think.

I feel he will limp across the line.

(END VIDEO CLIP)

VAUGHN: Neil, Trump's bet for the nomination, former V.P. Joe Biden, will be on the stage tomorrow night -- Neil.

CAVUTO: AKA sleepy Joe. All right, Hillary, thank you very, very much.

So what if I told you it's this other event going on in Washington that could have more of an influence on how this race is shaping up than any of those candidates talking either tonight or tomorrow night? In other words, if the betting is that the Federal Reserve goes ahead and cut interest rates for the first time in a decade, does that grease the skids for the president or provide the very environment that he wanted and in fact demanded from the Federal Reserve, all these Democratic candidates notwithstanding?

Let's go to Democratic strategist David Burstein, Wall Street Journal's Bill McGurn, and Republican strategist Alexandra Wilkes.

You know, Alexandra, you could look at the Federal Reserve's likely cut tomorrow -- it's not a given, but it looks like likely -- as helping Donald Trump. He's been demanding it for a long time, and it's possibly delivered the goods.

ALEXANDRA WILKES, AMERICA RISING CORP.: Well, look, I certainly hope that the Fed cuts interest rates, and I hope that the economy continues to grow. I mean, I think that that's definitely something that will lead to the president's reelection in 2020.

But this is why Democratic talking points and rhetoric are so dangerous, right? Because it's difficult for the president maybe to communicate with the average voter about the Fed and their effect on the economy and how that's all shaping up in terms of hampering potential growth, as opposed to Democrats, who say some guys aren't paying their fair share, we're going to demand that they pay their fair share and give it to you for free.

So I think that the president, he's going to have to make a larger argument, that it's free market principles that are underpinning this enormous growth that we're seeing, and that's why Americans should vote GOP, because the Democrats are looking to fundamentally change the way that we operate in this country.

CAVUTO: So you prefer the Republican? Just as a GOP strategist, that makes perfect sense.

(LAUGHTER)

CAVUTO: So, Bill, I'm just trying to get a gauge here. To cut rates at a time the economy is still fairly strong is unusual. And I'm wondering how this plays out.

BILL MCGURN, CONTRIBUTOR: Yes.

Look, if I really understood the Fed policy, I would be retired in Bermuda somewhere living in a mansion. But that's part of the problem. I think it's a little confusing, if you go back to December, when they made their move to tighten, and there were a lot more troubling signs for the economy then.

So the economy then is more troubling. You cut -- you raise. And, today, it looks stronger, and you loosen. It doesn't seem to me coherent, what they're doing. I mean, I think the president...

CAVUTO: On part of the Federal Reserve?

MCGURN: I think the president has a beef, but it may not be the one he's voicing.

All presidents like lower interest rates, especially...

(CROSSTALK)

CAVUTO: He just says it a lot more often.

MCGURN: He says it more vociferously, and especially if you're running for reelection.

But I'm not -- I'm not so sure the Fed's communicating. I mean, shouldn't it be a much clearer measure? Shouldn't we have almost no doubt what they're going to do?

CAVUTO: Well, I guess I could see some of the logic, David.

I mean, we're worried about interest rates and slowing economies worldwide. And maybe just to keep pace with that, we're going to cut. That's the strategy for it, not to cow to the president's demands.

But I'm wondering, as, you know, someone who looks at the Democratic Party, I mean, if this gives the economy more oomph, as it possibly could, that would be a detriment to all these Democratic candidates, right?

DAVID BURSTEIN, DEMOCRATIC STRATEGIST: Well, look, I mean, the question about a strong economy, everyone wants a strong economy.

CAVUTO: Except Democrats.

BURSTEIN: No, Neil. We have talked about this before. Democrats want...

(CROSSTALK)

CAVUTO: It would help if it were a little weaker, though.

BURSTEIN: Well, I think there's no question that the president's reelection prospects very much count on this point.

We have seen it in all the polling, right, that an economic downturn of any type would be the biggest obstacle for the president.

CAVUTO: Right.

BURSTEIN: But I think more important than what outcome the election is, is how the economy is actually doing.

I do think, though, Democrats are proposing a different path forward, which might, in the long term -- in the short term, not go -- create more instability, but I think in the long term is the right way to go for many Americans.

So, I think there is a fundamental difference here. And that's why we have elections. That's what it's about.

CAVUTO: Indeed, that is why.

You know, Alexandra, what did you make of the president saying, you know, if the Federal Reserve had been the same Federal Reserve during the Barack Obama administration, we would be thousands of points higher, the economy would be putting in 5 percent-plus GDP quarters?

He didn't say this go-around, but he's mentioned that in the past.

WILKES: I can see his frustration right, because, of course...

CAVUTO: But you don't agree with it?

WILKES: Well, I mean, look, I think that, like Bill, if I understood Fed policy, I would be a lot richer.

CAVUTO: No, this is what the president said.

WILKES: Right.

But, even still, look, I think that what the president is voicing is a political frustration with where the Fed has...

(CROSSTALK)

CAVUTO: Do you agree with that? Had the Fed not done any of this stuff, we'd be much higher?

WILKES: I think it's quite possible. I think it's quite possible that Fed policy is...

(CROSSTALK)

CAVUTO: What do you think, Bill?

MCGURN: I don't know. I mean, the economy's pretty strong.

I think -- those are some of the question marks that you just don't know. I mean, my understanding is, the Fed is -- it's supposed to be about price stability and so forth.

But it just seems all these other things are factoring in now.

CAVUTO: Do you think, David, real quickly, what the -- normally a cut in rates implies that things are slowing down a tad. And a lot of the Democratic candidates have talked about how uneven this recovery is, that there's a bifurcation between the rich and all that. I get that and all.

But the fact that matter, most Americans like the economy. Most Americans are very impressed with what's going on. They're not necessarily going to credit Donald Trump for all of that. But is that a risky argument for them to make?

BURSTEIN: Well, I think it is, because there's not a clear, what is going to be different?

I think that's why you're seeing more talking about health care and other issues, where there's still a lot of dissatisfaction among voters.

CAVUTO: And it won them the House, touting health care.

BURSTEIN: Right, exactly, because I don't think saying the economy is good, but it should be better -- I happen to think that's true. But that's not really a good argument actually win votes on Election Day.

CAVUTO: OK.

WILKES: I mean, look, I think where the president could really drive this argument home is continuing to contrast his policies with those of the Squad and socialism and fundamentally redefining our country and our economic policies.

I think that that's what could really drive home the argument for continued...

(CROSSTALK)

CAVUTO: And don't get on the tangents and all the other stuff.

MCGURN: You know, Neil, that's an opportunity for the so-called moderate Democrats tomorrow night, right?

I mean, part of the problem is, some of the Democrats seem to be...

CAVUTO: Where are they?

MCGURN: Were denying the economy, the growth.

And I -- and the last time, you would have thought that undocumented workers were the main constituency of the party, free health care. There's a chance I think for some of these people, Amy Klobuchar -- is she on tomorrow or Wednesday? To make their point.

CAVUTO: To shine, to get their moment.

MCGURN: But they have to be willing to take the heat from it, because it's not going to be popular to say.

CAVUTO: All right.

MCGURN: But they need it if they're going to make it to September and the debates.

CAVUTO: Yes, these next two days could tell.

All right, the president, of course, has been stomping on his own message by talking about other things that have nothing to do with some of the economic improvements, including for minorities. His ongoing battle with Elijah Cummings is not settling down any bit.

But we're talking to a lot of folks who are saying, focus not so much on his words, but on his actions, because, for African-Americans, when it comes to those actions, he has delivered the goods.

Is that true?

After this.

(BEGIN VIDEO CLIP)

TRUMP: You're living in poverty. Your schools are no good. You have no jobs; 58 percent of your youth is unemployed. What the hell do you have to lose?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

CAVUTO: You remember this?

(BEGIN VIDEO CLIP)

TRUMP: Look how much African-American communities have suffered under Democratic control.

To those, I say the following. What do you have to lose by trying something new like Trump? What do you have to lose?

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

CAVUTO: Well, candidate Donald Trump telling African-American voters to take a chance on him as president. That was his message in 2016. He got a lot of votes for that.

This is his message now:

(BEGIN VIDEO CLIP)

TRUMP: What I have done for African-Americans in two-and-a-half years, no president has been able to do anything like it, unemployment at the lowest level in the history of our country for African-Americans. Nobody can beat that.

You look at poverty levels, they're doing better than they have ever done before.

(END VIDEO CLIP)

CAVUTO: All right, so is he saying follow what I do, not necessarily what I say?

FOX News contributor, author of "Taken for Granted: How Conservatism Can Win Back the Americans That Liberalism Failed." It's due out in November. It's a very good read. Looking forward to having him on when it is formerly out, Gianno Caldwell.

Gianno...

GIANNO CALDWELL, POLITICAL ANALYST: Thank you.

CAVUTO: ... the president is saying, all right, I have been saying some things that might have ticked some folks off about Elijah Cummings and Al Sharpton.

But follow my actions. Follow the record low unemployment for African- Americans, the wage surges for African-Americans that eclipse those of whites. Follow that, because that is something that proves I'm helping them out as a community.

What do you say?

CALDWELL: Let me say something that may be considered very controversial, but very true.

President Donald Trump, from a policy perspective, have done more for African-Americans than Barack Obama, George H.W. Bush, Bill Clinton, George -- George W. Bush, and just about anybody else combined.

When you think about the fact that this president has jumped in to do so much -- we talk about record low unemployment. We talk about the First Step Act. We talk about reauthorization of the Second Chance Act. We talk about opportunity zones. We talk about pardons.

When we talk about all the things that his administration has delved into for the African-American community, it's something that we haven't seen before. And this was -- this is within his first term.

So when you talk about, what do you have to lose, the real question is, what do you have to gain? And I can point to those many items I just mentioned.

CAVUTO: You know, Gianno, one of the things that the president's comments, go back, and then adding in this fight with the Elijah Cummings, and, by extension, Al Sharpton, I don't necessarily mean to put them in the same category, but that it's going to make people forget that, forget the gains that you alluded to, forget what he's doing on the economic front, and that he stomped on that message.

What do you think of that?

CALDWELL: Well, let's be very honest. Tone does matter when we're having these conversations. You do have the bully pulpit as the president. It means a great deal.

At the same time, Neil, I write about in my book "Taken for Granted: How Conservatism Can Win Back the Americans That Liberalism Failed," but liberals, the Democrats have...

(CROSSTALK)

CAVUTO: Touche, by the way, mentioning the book title. Brilliant.

CALDWELL: Touche.

CAVUTO: Keep going. Yes.

(LAUGHTER)

CALDWELL: Liberals, Democrats have failed us.

We talk about on the South Side of Chicago, where I'm from. We have these instances all the time, whether it be Baltimore, Chicago, Detroit, wherever you want to mention in these urban centers, they have taken us for granted. These issues don't just appear. They didn't just happen when Trump got into office.

These things have been happening for decades. And people have been crying out and pleading for help.

But you know what happens? It falls on deaf ears, because the cycle that we have seen in these urban centers are, Democrats rule, and if you get one out, you're going to get another one in, and it becomes the same cycle that reverberates throughout our lives, where we're trapped into a systematic poverty and victimhood that never changes.

So, now you got a president who's using his bully pulpit for whatever reason. I don't have to go into whatever reason, whatever his narrative is. It doesn't matter, so long as something changes because of what he's saying, because what he's saying is, in fact, true.

This isn't -- this isn't false narratives. This is reality. And it's true for so many citizens across this country that have been hurting under Democratic rule.

CAVUTO: You know, Gianno, I have covered the president for many years, decades back to his business days. He might be a lot of things.

And, of course, he's not a particular fan of mine or his fans, fans of mine. But he might be a lot of things. He's not a racist. And I think what has got so many upset is the words he chooses or that they're somehow coded to imply racism, to say rat-infested referring to Baltimore.

You know some of the arguments. I want you to react to something that Democratic strategist Antjuan Seawright was telling me yesterday about his language. Listen to this.

(BEGIN VIDEO CLIP)

ANTJUAN SEAWRIGHT, DEMOCRATIC STRATEGIST: Can I tell you a political reality and a reality for people who look like me?

We -- there are people in our community and in communities across this country, even working poor white people, who are trying to forget about trying to make ends meet. They're putting two ends together, hoping they meet under Trump's economy.

So this idea that everything is so peachy and cream for people of color and communities around the country, I think, is a false narrative. That's not the reality.

(END VIDEO CLIP)

CAVUTO: What did you think of that?

(LAUGHTER)

CALDWELL: Well, what he said was a false narrative.

Certainly, not everyone is going to be happy in any one situation. But we have got record job openings, more -- more job openings than there are people to fill them.

We talk about what's happened in the Appalachian region, which I also talk about in my book. They said that we wouldn't get coal jobs back. We're getting them back. They said factory jobs are gone. That's a lie. They said that African-American unemployment will never -- never be reduced, it will always be high. That's another lie.

These are all false narratives that they're trying to combat, especially the presidential candidates.

CAVUTO: All right.

CALDWELL: They're trying to combat these false narratives. We're going to raise taxes and then $15 minimum wage, so we therefore are going to put people out of business, when there's a lot of jobs out there and people can go and get them.

CAVUTO: Gianno, you're your own man. You say the good and the bad about the president, good and the bad about Democrats.

Look forward to the book. Always a pleasure having you on.

CALDWELL: Thank you so much for having me, Neil.

CAVUTO: All right.

So in this heated debate here, we have to get real. Whatever you think of the president, whatever you think of everything else, just be honest, and look at things in a clear, clear way.

We will have more after this.

(COMMERCIAL BREAK)

CAVUTO: Oh, boy. Now Capital One is in a world of hurt, getting hit with a lawsuit, after that massive data breach that affected more than 106 million customers.

Robert Gray in Los Angeles with the very latest.

Hey, Robert.

ROBERT GRAY, CORRESPONDENT: Hey, Neil.

Yes, and it's already one of the biggest bank breaches ever. So you knew the lawyers wouldn't be far behind. Now, an FBI complaint says the hacker got information, including Social Security numbers and credit scores, of about 140,000 people.

This follows major hacks in recent years at credit reporting firm Equifax and at Facebook, which exposed data between them of some 200 million people. So even if your data hasn't been exposed in one of these hacks, experts say you're still at risk.

(BEGIN VIDEO CLIP)

SCOTT GRISSOM, LEGAL SHIELD AND ID SHIELD: It can be any combination of information, your name, your date of birth, your address. And that gets pieced together and sold to the Dark Web in ways that can compromise your identity down the road.

(END VIDEO CLIP)

GRAY: Thirty-three-year-old Paige Thompson allegedly accessed the bank's data back in March through the bank's faulty firewall. She was caught after bragging about it online.

Now, she's a former Amazon Web Services employee. She identifies herself online as a hacker.

Capital One CEO Richard Fairbank said in a statement: "I sincerely apologize for the understandable worry this incident must be causing those affected and I am committed to making it right."

Well, here's their first steps. They said most of the exposed data involves information submitted by customers and small businesses that applied for Capital One credit cards going all the way back to 2005, including addresses, dates of birth and self-reported income.

The nation's fifth largest credit card issuer says it will contact those affected by the hack and offer them free credit monitoring and identity protection.

And, Neil, you teed it up, lawyers jumping right in, slapping Capital One with a class-action lawsuit, accusing the firm of serious security failures and negligence, after they have had multiple past security breaches, and clearly have not cleaned up their act, according to these lawyers -- back to you.

CAVUTO: Robert Gray, thank you very, very much.

To David Kennedy now, cybersecurity consultant, TrustedSec founder.

It's interesting, David. I guess, in Capital One's case, a lot of this stuff is uploaded to the cloud, I guess the -- Amazon's cloud, and not that that, in and of itself, is dangerous. But a lot of banks avoid doing that, for fear of something like this.

Is this going to give them even more pause going forward?

DAVID KENNEDY, CYBERSECURITY ANALYST: A lot of companies are really trying to shift towards the cloud because of the scalability and ease of use, which in itself can cause a lot of major issues, when you have ease of use and you misconfigure something in a cloud environment.

Financial industry, you're right, traditionally has not moved to the cloud because of security concerns and privacy concerns around customer information.

But we're seeing it become more and more common for the financial industry to start to leverage the cloud more and more, usually just with less sensitive data. The fact that this has been out since 2005, and have over 106 million records, it's an alarming number to see in a cloud infrastructure, right?

CAVUTO: Now, what I'm curious about is, when you say less sensitive data, credit reports, or Social Security numbers, or credit applications for either cards or home equity loans, when that kind of stuff happens, that's pretty sensitive data right there.

KENNEDY: That is. That is.

And, normally, what I'm talking about on the sensitive data is anything that is what we call person-identifiable information, or anything that could be related to you, credit card numbers, things like that, that are related to a person's identity.

CAVUTO: Stuff that people could steal and use, right?

KENNEDY: That's absolutely right, anything that you can leverage from that.

Sales information might not be as sensitive, for example. Trading or -- trading information that isn't relevant to specific individuals, those might be less sensitive. All of these are what we typically see the cloud being leveraged for.

When it comes to trying to protect your personal information, though, usually, having encryption in place, ensuring that it's protected, and having good controls is what we consider best practices, and especially in the finance industry.

CAVUTO: You know, the finance industry has a lot of stuff on a lot of people, whether you're investing through them, have various credit cards, mortgages, home equity loans through them.

How should they handle that? I mean, they have got a lot under their umbrella, particularly traditional banks that have merged with financial institutions or brokerage -- all brokerage types. That's a lot more data that's at risk, potentially, right?

KENNEDY: That's right.

I mean, if you look at, historically, with Equifax, for example, substantial amount of information on individual employees -- individual people. Same thing for the financial institutions.

And if you look at your Social Security number, your Social Security number is actually going for cents, not dollars or multiple dollars. It's going for cents, because it's not really relatable to sell in the underground market.

But you start to put together financial information, like bank account numbers, addresses that are associated to high net worth individuals, all those pieces of data that can absolutely be sold for a pretty good yield in the underground market, those types of things are things that definitely need to be protected, and Social Security numbers as well, just less of a monetary value towards those.

So banks definitely need to do more. Encryption is something that is a proven science around trying to protect information. The fact that we have unencrypted data sitting in cloud infrastructures for large periods of time, that's an alarming trend. And that needs to change.

Banks, everybody needs to do a better job at protecting that type of information, especially our information. I think I'm on eight different credit monitoring services right now. So what's another one, right? But that doesn't help me after the breach.

CAVUTO: Well, if they go through to you, then I know all bets are off.

David Kennedy, thank you very, very much.

KENNEDY: Thanks, Neil. Good to see you.

CAVUTO: All right.

Well, China and the U.S. are back talking person to person right now about trade in China. But is the president saying today that they're deliberately dragging their feet, hoping that he is not reelected, and they can deal with someone else?

After this.

(COMMERCIAL BREAK)

CAVUTO: A lot of companies posting earnings this time of year. That's what they do.

Apple's one of the bigger ones we look for some direction, revenues, earnings better than expected, $26 billion worth of iPhones sold -- after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: I think, if China had their wish, they would wait until after the election. They will pray that Trump loses, and then they will make a deal with a stiff.

(END VIDEO CLIP)

CAVUTO: The stiff could be sleepy Joe.

We have no idea, but the president making it clear that maybe one explanation for China maybe dragging its feet on these whole trade talks is, they hope he's not the guy they ultimately have to conclude them with.

To Blake Burman at the White House right now on how things are faring -- Blake.

BLAKE BURMAN, CORRESPONDENT: Hi there, Neil.

We had an interesting start to the day over here, because, as Steve Mnuchin, the treasury secretary, and Robert Lighthizer, the U.S. trade representative, were over in Shanghai, their first face-to-face talks with their Chinese counterparts since May, when the trade deal or the discussions at least broke apart, back over here at the White House, President Trump was tweeting.

And he was heavily critical of China, the president writing at one point that China is not following through on a promised large-scale ag buy, and suggested again that China might try to wait him out until November 2020.

But then he also had this warning right here. He wrote at one point -- quote -- "The problem with them waiting, however, is that if and when I win, the deal that they will get will be much tougher than what we are negotiating now or no deal at all."

So that begs the question, Neil, if the president thinks that China might be trying to wait him out until the election, does that mean there might not be a trade deal until November 2020, at the earliest?

I put that question to the president, and this was his response. Watch.

(BEGIN VIDEO CLIP)

TRUMP: China would love to wait and just hope -- they hope -- it's not going to happen, I hope. But they would just love if I got defeated, so they could deal with somebody like Elizabeth Warren or sleepy Joe Biden.

China is dying to make a deal with me. But whether or not I will do it -- it's up to me; it's not up to them.

(END VIDEO CLIP)

BURMAN: The president also continued to highlight China's economy on several different occasions today, Neil, noting that its last GDP reading was the lowest GDP reading that country has had in 27 years.

And the president said he thinks, at least in part, his tariffs are the reason why -- Neil.

CAVUTO: I'm just wondering, if you had a nickname, what could it be? We can't call you sleepy Blake Burman, but...

BURMAN: Sleep -- I'm up too early in the morning for sleepy Blake. White House Blake? I don't know...

(CROSSTALK)

CAVUTO: I don't know. We will work on it. But you challenged me. And now I'm going to do something.

All right, Blake, thank you very much, Blake Burman.

BURMAN: You know that they call me business Blake, Neil, every now and again around here. So, maybe...

(CROSSTALK)

CAVUTO: You don't want to nerd out. You're too young to nerd out.

BURMAN: No, no, no.

CAVUTO: Let me nerd out.

All right, buddy, thank you. Thank you very much, Blake Burman.

BURMAN: I will let you do it. See you, bud.

CAVUTO: I want to get reaction to all this.

James Carafano joins us, Heritage Foundation national security expert.

James, if you will indulge me first on this China issue the president is taking, that maybe China would prefer to deal with another president, not this one, and will just drag its feet until it has one.

JAMES CARAFANO, SENIOR FELLOW, HERITAGE FOUNDATION: Yes, I have a slightly different read on that, because I do agree China, North Korea, Iran, in many ways, they're trying to run this out to see the results of the election.

But I think, in each of them, I see signs that they increasingly think that Trump is going to get reelected. So what this means for the Chinese is having to cut a deal, and then Trump is gone, it's no big deal.

But if they cut a deal, and Trump is still there, he's going to pressure that they honor that deal. He's actually been pretty tough on them in the negotiations. So, like, they're not just going to -- they can't get a faux deal. They need to do a real deal.

And so they have got to fight hard for that deal, because they're going to have to deal with him after the election. I think that's their calculus right now.

CAVUTO: Then let me switch to North Korea. What is the calculus with continuing to do these tests, short-range of missile tests, though they may be technically not in violation of what they promised they wouldn't do?

CARAFANO: Right.

CAVUTO: But they are provocative. And, of course, we do know the relationship Kim Jong-un and President Trump have engendered.

I'm just wondering what his strategy then is with North Korea.

CARAFANO: Right.

So here's the deal with North Korea. And you have to remember, all this is really based on not conjecture, but based on an assessment of their external behavior. We don't have intelligence. We don't know what they're really thinking.

But just looking at putting this in the context of what they're doing, I think, from the North Korean perspective is, what's changed? The only thing that's really changed in the last decades that might make them willing to do a deal is Trump.

If Trump isn't there after 2020, then they'd be really dumb making a deal. So I think they really want to wait to see if Trump is still around before they think about making a deal.

But having said that, you just can't sit around and do nothing for 18 months. And so what the North Koreans have been doing is, is kind of a very modest level of just -- of just provocation, just so that they have got cards to play and make people know their rep.

But they're really not sending real signs that the negotiating process is in danger or that they're really interested in escalating. So I just think they're marking time to see if Trump comes back.

CAVUTO: We will watch it closely.

James Carafano, thank you. Always good seeing you.

CARAFANO: Thanks for having me.

CAVUTO: All right, there was no new iPhone announced, if you think about it, in the latest quarter for which Apple is reporting much-better-than- expected top-line and bottom-line growth, in other words, on the revenue front and how much they're earning on that revenue.

Yet, with all that, iPhones were selling off the charts. We had a record number of them going out the door, at least for that quarter, for the latest quarter, and signs that bigger things could be coming, because, after hours, the stock is up some more.

A company that some say is a proxy on us and technology and retail all in one -- after this.

(COMMERCIAL BREAK)

CAVUTO: You know, a lot of people look at Apple as sort of a proxy in the economy, a proxy on us, because you think about, it's media, it's technology, it's retail, it's all under one roof.

So that's why the stock gets disproportionate interest, not only in the financial community, but a lot of people during earnings season.

And this is like Christmastime for Charles Payne. I mean, he loves earnings season, lives for it. You do not bother him, though. You don't say, hey, Chuck, you want to go out for lunch? No, no, no.

(LAUGHTER)

CHARLES PAYNE, HOST, "MAKING MONEY": Crunching these numbers.

CAVUTO: Earnings season. Crunching these numbers.

(LAUGHTER)

CAVUTO: So you have had a chance, my friend, to look at the whole Apple stuff. What do you think?

PAYNE: You know, this is a really great quarter for Apple in the sense that they have proved a couple things, that their sales could be sort of flattish in China, and they can do OK, because they have other markets, and they have more than just the iPhone.

Now, the release that came out, they used these superlatives: We had accelerating growth in wearables and strong performance in iPad and Mac, and significant improvement in iPhone.

So, but here's the interesting thing, Neil.

CAVUTO: Don't knock it. I built a career on that.

(LAUGHTER)

PAYNE: IPhone sales were down about a lot, like $4 billion year over year.

CAVUTO: But come on. It was like $26 billion in revenue.

PAYNE: But the Mac surged. The iPad surged.

And these wearables, people are finally -- $5.5 billion for wearables. This number is through the roof, and what Apple's really doing well in is now services. So it's no longer maybe a one-trick pony.

CAVUTO: But what does it say about us, Charles?

You get into oftentimes on your show and elsewhere this idea that the consumer has been remarkable. And latest confidence figures seem to echo that.

PAYNE: This was the third best confidence number since 2000, one of the biggest beats ever.

CAVUTO: Wow.

PAYNE: And here's what's happening. Here's what's really amazing about it. Our incomes are going up. And so are our savings.

We have become a different kind of consumer post-Great Recession. I think you got to hark back all the way back to the Great Depression. You know, people know their great-grandfather, their grandfathers, they called them misers.

No, they were scarred. And even though we're not scarred to that degree, they have a certain amount of discipline that I think really is great, because I think that's the underpinning to the stock market rally and this economy.

Nevertheless, when we do spend, we spend on something like these Apple products. And so Apple...

CAVUTO: We pick and choose.

PAYNE: We pick and choose.

CAVUTO: You talk about the latest savings.

The latest savings number -- and that's an erratic number, though, can't it be? I mean, where are we at now on that?

PAYNE: December 2007, the month that the Great Recession began, our savings rate was like 3.4 percent. Right now, it's 8.1 percent.

CAVUTO: Wow.

PAYNE: It's more than doubled.

Now, wages have surged since then, jobs have surged since then. And we are not going out willy-nilly spending that money. Again, I think the American consumer has been scarred in a good way, in a good way.

And they moderate. So we are spending, but we're not -- we're just not going out there and getting over our skis like we did in the past.

CAVUTO: But this trade thing is always a variable that at times can encourage and then give Americans pause.

PAYNE: I think the headlines do. The same report in the prior month actually had -- saw this biggest monthly decline in 15 months. I think that was the headlines.

You go back to December, Neil, and we had one of the biggest surges ever in wages, one of the biggest declines ever in spending. I put it all to headlines, headlines of recession. People saw them and started to react to it.

It almost became a self-fulfilling...

(CROSSTALK)

CAVUTO: Right.

One of the things we have also talked about is that there is no real wage inflation. So the Federal Reserve is now poised to address that reality, because you have been talking about this long before the president was bemoaning the Fed rate hikes, that it was chasing a ghost that wasn't there.

PAYNE: Right.

CAVUTO: Now, if they, as expected, cut rates tomorrow by a quarter-point, then what?

PAYNE: I think Wall Street would be OK with that.

I think, though, there's more. People anticipate there are more. Without a doubt, I think, universally, most people think that rate hike in December was unnecessary. January 4 is when Jerome Powell had his epiphany. He shared it with the world. Most people weren't paying attention.

CAVUTO: Right.

PAYNE: He said wage inflation isn't the same as price inflation.

CAVUTO: And you loved that, right, because it was the first Fed chief to say that.

PAYNE: Right.

(CROSSTALK)

PAYNE: We all should love it, because in the past whenever wages started going up and our unemployment rate was low, the Fed would start hiking rates. They triggered several recessions, if not all recessions, by their actions.

He saw something finally and said, OK, I'm going to allow Main Street to make money, to have wage increases that they haven't had in decades, real wage increases, without putting some speed bumps in the way.

And that's been remarkable.

CAVUTO: Not too shabby.

Which is more fun for you, earnings season or leading, as you will with FOX Business, the Fed decision tomorrow?

PAYNE: Oh, the Fed decision tomorrow.

CAVUTO: Really?

PAYNE: Yes, because I have got an all-star panel.

Someone told me a guy named Neil Cavuto is going to be there.

CAVUTO: No, I'm just -- I see you get so excited about this stuff.

(LAUGHTER)

CAVUTO: I always say, Charlie, you need to get out. You need to have fun.

PAYNE: These guys that talk about fishing, I'm like, yes, I would rather crunch Apple's numbers.

CAVUTO: I'm telling you, guys, we kid each other a lot, but the guy's a genius.

Remember where he was saying and what he was saying back in December, when the whole bottom of the market was falling out.

And it was ruining a lot of Christmases. And people were saying, oh, what are we going to do? And he just said, man, oh, man, buying opportunity. If you had listened to him then, well, you probably wouldn't be watching now, would you?

(LAUGHTER)

CAVUTO: That's OK. It's OK. We move on.

All right, Charlie, watch him, again, special FBN coverage on the Fed's move.

PAYNE: Thanks a lot, Neil.

CAVUTO: It starts at 2:00 p.m. Eastern time tomorrow. He will take through that whole hour with some of the latest developments and these charts he digs up from like Phoenician times. Don't even ask.

We will have more after this.

(COMMERCIAL BREAK)

CAVUTO: All right, the Senate is poised to pass that big spending measure.

Fox News' Chad Pergram on Capitol Hill with the latest.

Where are we on this, Chad?

CHAD PERGRAM, SENIOR CAPITOL HILL PRODUCER: Well, they have not locked in a time for this vote.

Keep in mind that the House of Representatives that passed this passed this last week. And there's always concern here on Capitol Hill about these bills sitting out there for too long and getting stale and the political enzymes start to eat away.

President Trump has blown up some of these deals before. The Senate minority leader, Chuck Schumer, is very concerned. Listen.

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER, D-N.Y., MINORITY LEADER: I believe we should do this today. It's the most important thing we can do. Treasury Secretary Mnuchin has said there's an danger to the debt defaulting.

Let's just get this done and get it done now. I asked Speaker McConnell -- Leader McConnell on the floor today, let's get it done today. There would be no Democratic holdup.

(END VIDEO CLIP)

PERGRAM: Now, there's some concern that Republicans are wary about this bill because there are no spending controls.

John Kennedy is a Republican senator from Louisiana. He said he's just not a no. His quote, he's a hell no. That's the problem. And they might need Democratic senators who are away at these debates, the presidential debates in Michigan, to come back and vote.

Keep in mind that there are only 65 House Republicans who voted for this bill last week. The Democrats in the House, they pulled the freight on their own side, 219.

I talked to Senate Appropriations Committee Chairman Richard Shelby a couple of moments ago, and he said -- quote -- "If it doesn't pass, we will have chaos. Do I know it's going to pass? No." -- back to you, Neil.

CAVUTO: All right, Chad, thank you very, very much.

In the meantime, did singer Katy Perry actually copy from a Christian rap song? A jury apparently thinks so. We listen, then you decide.

(COMMERCIAL BREAK)

(MUSIC)

CAVUTO: All right, you probably know that song from Katy Perry, but do you know this one?

(MUSIC)

CAVUTO: Does it sound a little too similar?

Well, a California jury seems to think so, concluding that Perry's "Dark Horse" copied the Christian rap song "Joyful Noise."

So what happens next?

Attorney Natalie Elisha Gold joins us right now.

What happens now? I mean, the jury found that, yes, this sounds a little bit too similar for comfort.

NATALIE ELISHA GOLD, ATTORNEY: They did.

And they found that she in fact did pursue -- was doing copyright infringement. So the big question is, how much will this cost her, Neil?

And, typically, when there is a music or sound or book that you copy from, you do a licensing agreement on the front end. So you say, I'm going to pay you six or seven figures, we're going to use this, and then we're going to be in the clear.

Here, that didn't happen. In fact, according to Katy Perry, she only heard "Joyful Noise" after the lawsuit was filed. But it didn't really matter to the jury.

CAVUTO: All right, so she would have to pay up for something like this. Can you give me a ballpark of what that might be?

ELISHA GOLD: It's a California jury. I mean, I wouldn't be surprised if it would be high seven figures.

CAVUTO: Really?

ELISHA GOLD: And that is the biggest concern. Yes, because when you go -- think about the amount of money Katy Perry made from this.

Now, it shouldn't all go to "Joyful Noise," because her celebrity, of course, propelled this to the great success it had. However, you cannot take someone's property, which is a fundamental right in our American jurisprudence, without paying for it.

And that's what this L.A. jury came back and said. I wouldn't be surprised if she has a big payout. And I hope, for Katy's sake, that she has very good wealth preservation and asset protection in place, so that she doesn't have to personally write this huge check.

CAVUTO: All right, we all can see a little bit and hear a little bit of other songs in new songs. I guess that happens.

But, real quickly, as a lawyer, what do you tell artists going forward?

ELISHA GOLD: You have to cross your T's and dot your I's. You have to do everything in your power to make sure this doesn't happen, because Katy was so sure that she was going to win this case, she even joked, "I could sing the song," when the technology didn't work in court.

Not so. The L.A. jury wasn't swayed by that, and they still found against her.

CAVUTO: Interesting.

ELISHA GOLD: Protect yourselves on the front end and protect your property.

CAVUTO: Although, in the video, she was the only one who had the dancing poodle. I will just leave it at that.

(LAUGHTER)

CAVUTO: All right, Natalie Elisha Gold, thank you very, very much.

Them there are the breaks.

Now here comes "The Five."

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