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This is a rush transcript of « Your World with Neil Cavuto » on September 21, 2022. This copy may not be in its final form and may be updated.

NEIL CAVUTO, FOX NEWS ANCHOR: All right, you’re not kidding, Martha.

The Dow sliding, now at session lows here, finishing the day off 522 points. You probably know the familiar drill. Rates go up, stocks go down. And something the Federal Reserve did today signaled that rates could continue going up, maybe at an aggressive pace, maybe a lot longer and a lot higher than anyone thought.

By day’s end, we were shellacked, with the chairman of the Federal Reserve essentially saying, I think I have got a handle on this, but it could be a bumpy ride.

Welcome, everybody. I’m Neil Cavuto. And this is your, well, red world, a lot of red, a lot of selling, all the major market averages, again, on the prospect that we are looking at much higher rates down the road. We got our third three-quarters-of-a-percent hike in a row, with signs that maybe, by year-end, rates could be anywhere from a point to point-and-a-quarter higher than where they are right now, or well north of 4 percent.

And some now wondering whether even that will be enough to deal with inflation that is double that.

Let’s get the read on what happened today and why.

Jackie DeAngelis — Jackie.

JACKIE DEANGELIS, FOX BUSINESS CORRESPONDENT: Good afternoon to you, Neil.

This is the Fed’s fifth rate increase this year. It’s the fourth increase in a row and, as you pointed out the third time the market is seeing three- quarters-of-a-percentage point. Now, the market was trading higher for most of the session before the decision, indicating it was expecting a 75-basis- point hike today, rather than the full point percentage point that only a small group of market watchers still thought was possible.

But then, when the news broke, markets retreated. And they did that because the bottom line is this. As the Fed hikes rates trying to tame persistently high inflation, the economy will slow, consumers and corporations will see higher borrowing costs, and that’s going to impact the economy.

The consumer side, really important. The rate on a 30-year fixed mortgage is over 6 percent, compared to 2.86 percent at this time last year. If you were buying a $500,000 house, a $400,000 mortgage, you would see a 45 percent increase in your monthly payment.

And it doesn’t end there. Car loans could break through 6 percent as well. And credit card interest rates, already on the very high side, may continue to creep up too. The flip side of this, you’re finally going to earn a little bit more interest on your savings. Some high-yield savings accounts online are paying close to 2 percent, more for C.D.s.

Some people argued these rates should be much higher. But, still, Americans are seeing their savings dwindle, along with their retirement accounts, because of inflation and all this market volatility. That’s the reason credit card borrowing is up 13 percent year over year.

Now, the government won’t be exempt from higher rates either. The Committee For a Responsible Federal Budget had a warning: This rate hike could add $2.1 trillion to federal deficits over the next 10 years — Neil.

CAVUTO: Incredible. All right, Jackie, thank you for that.

To Art Hogan right now of B. Riley Wealth.

A lot less wealth today, Art. And I noticed we had violent, manic swings, up as high as 300 points, down — we closed out our lows of the day, 522 points. So whatever investors briefly took from this that was positive, they quickly were disavowed of that notion.

Who’s right?

ART HOGAN, MARKET STRATEGIST: Yes, I mean, it’s interesting.

These Fed decision days are always volatile. And the — and, usually, the first move is the wrong move. And I think that what happens between 2:00 and 2:30 is really a knee-jerk reaction. And so all we have is the statement and the dot plot and the summary of economic projections.

But then, when you get into the tone of the presser and the Q&A, you really get the sense that Jay Powell wants to remain as firm in his battle against inflation as he said it in Jackson Hole back in August. And, clearly, the surprise here — and Jackie pointed this out nicely — is that our estimate for where the Fed funds rate would be at the end of this year coming into today was 4.25. And now it’s 4.4 percent, according to the Fed, right?

So that is — that’s the big surprise. And the Street doesn’t like to be surprised. As a matter of fact, we tend to overestimate how far the Fed will go. And the other surprise is their terminal rate, which will happen in the first quarter of ’23, meaning when they stop raising rates and leave rates where they are for a period of time, is 4.6 percent. That was at 4.5 percent coming into today.

So although it doesn’t sound like much, it certainly is higher. And then the other piece of the puzzle, it sounds like it’s going to be for longer. It appears as though the Fed doesn’t cut rates until sometime at the end of ’24 to ’25. So we have got a higher, for longer mentality in the markets now.

And the markets just needed to readjust to that.

CAVUTO: Art, in listening to Jerome Powell, the chairman of the Federal Reserve, in speaking about this, he was kind of bumming me out, because he was kind of saying, well, I think we have got a handle on this. I’m paraphrasing here. Not exactly sure. We’re going to continue fighting against inflation.

So he has once again removed any doubt that he’s going to lighten on the gas pedal as he continues to do this. But I wonder if people are reading into that, A, this goes on longer, rates go higher than we thought, but, in the process, we fall into something pretty bad, like a recession?

What do you think?

HOGAN: Right, yes.

The pushback against that — and I don’t disagree with you at all, Neil. I truly believe that this is a Fed that doesn’t know exactly how far they will have to go, because they don’t know how quickly inflation will likely come down.

And we have seen some inflation come down, industrial metals, gasoline, and, to a certain extent, the housing industry, but not enough. And I think that that’s — I think that’s the message he’s trying to get across.

But in terms of going so far that we’re going to slam into a deep and long recession, sort of juxtaposed against where we are with the labor market right now, really doesn’t line up. So, to the extent that we likely will be in a recession, it likely will be short and shallow.

But the underlying economy remains pretty robust. So the point at which inflation finally gets close to the Fed’s target for long-term inflation and with inflation expectations kind of anchored at some pretty reasonable levels, we will likely see some economic damage. We will likely see unemployment go up, but I don’t think we’re talking about anything like 2008 and 2009, and certainly not going back to 2000.

This is much more of a sort of garden variety recession that’s going to spread some pain around.

CAVUTO: Yes.

HOGAN: But it’s the price we’re going to have to pay to get inflation back under control.

CAVUTO: Yes. And those prices we pay still get pricier. And that’s the problem here. Can this start to have an effect on bringing those rates down?

Thank you very much, my friend.

Art Hogan on that.

The political fallout is sweeping, as you might imagine, Republicans seizing on this as proof right now that the economy could be going to hell in a handbasket and rates are going to be going up for as long and far as the eye can see. Democrats, in the meantime, seizing on the good economic news that shows job gains are still good and the backdrop for this is still good.

Therein lies the debate, but all of this of course, in a midterm election year. You might have heard a thing or two about a big election less than seven weeks away. Normally, when the Federal Reserve is busy tightening in an environment right up to Election Day, as this could be, it’s not good for the party in power.

Jessica Tarlov here, Democratic strategist, Kellyanne Torrance from The New York Post, so — Kelly Jane. I apologize.

Kelly, one of the things that first came up was this idea that maybe the Fed can cool it. People were hoping they could settle down and stop with these big rate increases. The signal today from the Fed was, no, no, no, that’s not going to be the case. And history suggests that rate hikes right through an election can be bad for the party in power.

So play that out.

KELLY JANE TORRANCE, NEW YORK POST: Yes, very good points, Neil.

And I think Joe Biden may come to regret keeping Jay Powell on as Federal Reserve chair. We’re seeing the stock market dip, as it has with these rate increases before. And I think this one was necessary. You had two quarters of economic contraction. As you noted, mortgage rates are going sky-high. Could have a crumbling housing market.

So we have already seen some deflationary evidence. And so I don’t think really this rate was — a rate hike this high was needed. So what is it going to do? I think it will damage the economy. It could make any recession we may be in or about to be in even worse.

And Republicans, of course, no one wants to wish a bad economy on the country, but it certainly…

CAVUTO: It’s not a great — to your point, not a great environment.

And if you will think about it, Jessica, the environment where you have rates rising, or you’re coming over a period where rates had been rising, or the effect of what happens as those rates are rising, it’s very tough for the party in power, even if you go back, certainly, back in 1980, where you had a rising rate environment.

That not only got a lot more Republicans elected. It got that particular president thrown out, Jimmy Carter. And I’m just wondering, with that as a backdrop, and the fact that this is more often the case than not, should Democrats be worried?

JESSICA TARLOV, FOX NEWS CONTRIBUTOR: So, I think that it goes beyond just the impact of an environment where we have a number of rate hikes, the fact that history in general shows that the party in power, especially when you have had control of all of the levers of power — we have the Senate, the Democrats, and the House — lose, and often lose tens, dozens of seats.

And that was the expectation going into this. If we had had this conversation at the beginning of the summer, I would…

CAVUTO: But do you think this is worsening it, Jessica? You’re quite right, because it looked like — and it still might be the case — where Democrats are making some gains…

TARLOV: Yes.

CAVUTO: … maybe based on the Roe v. Wade, but this sort of gets us back to, it’s economy, stupid, and we don’t like this.

TARLOV: Absolutely.

The economy remains the number one issue, but it has come down in levels of importance. And I think, at this point, because there’s been so many months of having conversations about 7, 8, 9, 10 percent inflation levels — and we do have to add that this is a global phenomenon and Jay Powell is doing the same thing that people are doing all across Europe to try to contain the inflation.

But people have a baked in perspective on what they think of the economy. Just because Jay Powell did this today doesn’t mean that someone who thought the economy was great yesterday woke up and was like, oh, no, actually, I think it’s garbage. I’m going to start voting for Republicans on this.

(CROSSTALK)

CAVUTO: Well, I do think the backdrop, not to belabor that point…

TARLOV: No.

CAVUTO: And, Kelly, maybe you can help me with this, that the backdrop is what’s important. So I think people are reminded about higher prices everyday they go to the store, whether they’re Republicans or Democrats. We all got to eat and paying a lot more for that.

And I’m just wondering, Kelly Jane, from this and the experience prior presidents have had in an environment like this, it’s a jump ball. In midterm elections, an environment like this does put the party in power behind the eight ball. But it doesn’t necessarily mean that that translates two years later.

In other words, presidents had come back from this sort of morass, even Ronald Reagan in 1982, when it looked like he was a certain one-termer when they lost 26 seats. But he came back to win pretty handily. The same with Bill Clinton in an environment like this in 1994, and, of course, he came back to win pretty handily.

So, separating the two, what do you think?

TORRANCE: Yes.

And, of course, Barack Obama talked about getting shellacked in the midterms and then came back. But, yes, I mean, people do vote with their pocketbook. As you say, it’s the economy, stupid. And, yes, issues like abortion or having more effect than we thought they would have a year ago.

But, yes, I think, as you look around what’s going on, we’re seeing what happened in some states that tried to put huge restrictions on. Some people fought back and voted against it.

CAVUTO: Right.

TORRANCE: So I think the economy is going to again become the issue. And, of course, yes, I see the prices going up every day. And everybody I know is talking about this.

And you got to keep in mind, too, with what the Fed has been doing, of course, in response to its easy money of — in the last couple years, has sent stock markets down. And people have lost — we have lost about 40 percent of GDP and household wealth.

Now, I don’t think about that too much because I’m not planning to retire anytime soon. But a lot of Americans are, and especially a lot of Americans who vote are. And that’s the downside of the 401(k)s going down. That affects them too.

CAVUTO: No, you’re right. That’s the risk. By the way, when it comes to retirement, and a lot of people urge me to do so every single day. It really hurts my feelings.

(LAUGHTER)

CAVUTO: But, Jessica, let’s step back from this and where this goes, because you’re quite right. The underlying job market is very, very strong. People are still buying stuff.

They can’t keep enough of these new Apple iPhone 14s on the shelves. They’re going like crazy. They’re not cheap. So, you’re quite right. There’s a bit of a dichotomy going on here. But I’m wondering how it’s translating, because maybe those are just rich folks buying stuff.

Or how do you look at it?

TARLOV: Well, if you look at the reports out of big banks, like Bank of America — you look — AT&T released a report — they’re saying that they think that the economy is plenty healthy. Your last guest said that as well, that we still have a robust economy, and we might be in a shallow recession right now or heading into one.

And we haven’t really seen that before. Larry Summers, who has obviously been a focal point about the conversation on what’s going on with the economy, and he was the deciding factor, essentially, getting Joe Manchin on board with the skinnier version of the Inflation Reduction Act, has said that this is a bizarre recession, if it is one, that we haven’t really seen it play out like this.

And so we’re following all these traditional indicators that might not…

CAVUTO: Yes, but it does hurt, Jessica, does it not, when you tell people, don’t worry, things are fine?

TARLOV: Oh, I…

CAVUTO: There used to be that old joke that economists would tell me. Neil, no matter what the numbers say, if people are telling you it feels like a recession, then it is.

TARLOV: A hundred percent.

CAVUTO: Yes.

TARLOV: I mean, I feel it myself. We all do. You look at your Amazon card, and it’s the same as it was three weeks ago even and you’re like, oh, wait, that cost like 30 cents more than it did at that point.

And, obviously, there’s that image of Joe Biden signing — having the signing ceremony with the Dow down 1000 ticker right to the side of it, really terrible stuff that, in Democratic strategists’ mind, this — worst midterms nightmare, and I’m about to start living it.

So, obviously, these things are not necessarily positives for the Democratic case.

CAVUTO: All right.

TARLOV: But I do think it is baked in at this point what people feel about what’s going on in the economy.

CAVUTO: Yes, we all see it for ourselves.

All right, thank you, ladies, both of you.

TARLOV: Thanks, Neil.

CAVUTO: Again, the Dow down about 522 points, across-the-board shellacking in the markets here. Might be a short-lived event. Things stabilize tomorrow. We swung with an 800-point range. You don’t see that every day.

In the meantime, so many other big developments to tell you about, including the president of the United States at the U.N. hammering the Russians, and particularly Vladimir Putin. But that message, especially when it came to Mr. Putin, let’s just say, falling on deaf ears — after this.

(COMMERCIAL BREAK)

CAVUTO: All right, we might be annoyed in this country by interest rates that go higher and higher.

I believe, in Ukraine, they’re worried about more serious matters, life- and-death matters, and, of course, this wild card where Vladimir Putin is realistically looking at the option of using nuclear weapons in Ukraine.

The president spoke out about that earlier today at the United Nations.

That’s where you will find our Peter Doocy — Peter.

PETER DOOCY, FOX NEWS WHITE HOUSE CORRESPONDENT: Neil, President Biden has not in New York and will not in New York call to boot Russia from the U.N. — from the U.N. Security Council, even though he says that what Russia is doing is violating the very charter of the United Nations.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: And, to be very blunt, let us speak plainly. A permanent member of the United Nations Security Council invaded its neighbor, attempted to erase the sovereign state from the map.

(END VIDEO CLIP)

DOOCY: Russia is rounding up more troops to send to battle in Ukraine. And they are threatening to use nuclear weapons in Ukraine.

And President Biden mentioned all that, but he didn’t mention another big piece of the puzzle.

(BEGIN VIDEO CLIP)

NIKKI HALEY, FORMER U.S. AMBASSADOR TO THE UNITED NATIONS: … he didn’t do, which I wish he would have gone further, is call out the countries that are helping Russia. Call out the fact that China is helping. Call out the fact that Iran is sending drones. Call out North Korea for doing rockets.

He could have made that a bigger isolation, if he would have called those countries out.

(END VIDEO CLIP)

DOOCY: In addition to Russia, President Biden says he sees the other defining issue for these diplomats gathered in New York as climate change.

And he wants some credit for doing his part by signing that Inflation Reduction Act.

(BEGIN VIDEO CLIP)

BIDEN: Our investments will also help reduce the cost of developing clean energy technologies worldwide, not just in the United States.

This is a global game-changer, and none too soon. We don’t have much time.

(END VIDEO CLIP)

DOOCY: And that’s the biggest admission yet that the Inflation Reduction Act isn’t really about inflation reduction. It is about climate change. And that is what the president was bragging about on the world stage earlier today — Neil.

CAVUTO: Yes, a little off-putting there.

Peter Doocy at the United Nations.

Thank you, Peter, as always.

With us right now — and I have talked to this lady from the very beginning of this war, always was struck by her bravery, her countrymen’s bravery here. She’s with us right now. Kira Rudik is a Ukrainian Parliament member, kind enough to join us.

Very good to see you in the flesh and all of that.

KIRA RUDIK, UKRAINIAN PARLIAMENT MEMBER: Good to be here. Thank you so much for having me.

CAVUTO: You know, we were chatting during the break.

I can remember when people were thinking when the war started it would be over in days. Here we are, seven-plus months, and the tide has turned, hasn’t it?

RUDIK: It has.

And, today, I’m here in New York. I was protesting with fellow Ukrainians alongside the U.N., demanding that Russia will be kicked off the United Nations.

CAVUTO: It doesn’t look like it’s going to happen, though. How do you feel about that?

RUDIK: Well, calling — Neil, six months ago, nobody believed that we will stand for more than couple of days.

CAVUTO: Very good point. Very good point.

RUDIK: Then nobody believed we will receive heavy weapons.

CAVUTO: Yes.

RUDIK: Then nobody really believed that we will be going on counteroffense. Now watch us.

So, right now, I can only tell you, we are on the job. And we want to kick Russia off the U.N. And we do believe that it will happen, maybe not today.

CAVUTO: What did you make, though — here Vladimir Putin now talking about the nuclear option. That’s a little scary.

RUDIK: Well, I don’t think that it was any different like six months ago or five years ago.

But, today, when he made the speech, when he said about the mobilization and nuclear weapons, I think the voices that are there saying, Putin wants peace, will be more silent. The voices that would say, oh, there is a way to agree with him, would actually stop, because what we see, he only understands one language, is the language of power, language of force.

And this is why the plan that we have in the Ukraine has not changed since the beginning of the war. We will fight him. And we will continue asking for more and more support.

Look how effective we are when we finally started receiving the weapons that we need so badly. Look how well we can push him back and his forces.

CAVUTO: He’s just called up 300,000 reservists, on top of 137,000 additional soldiers. So he’s looking everywhere for more manpower to deal with this, but nothing seems to be working.

RUDIK: Yes, he said that he lost only, what, 6,000 men, but, for some reason, he needs 300,000 more to continue fighting.

CAVUTO: It’s a good point.

RUDIK: So, like…

CAVUTO: But what is it like for you, like, when you go back? And you obviously have friends there.

How are Ukrainians just putting up with this, seven months, on and on, unending?

RUDIK: It’s tough. Of course, it has been tough on everyone.

But it also — we know that it is on us to protect what is ours, to protect our motherland. And I know that every single Ukrainian is waking up with a question: What am I going to do today to bring our victory closer? This is what I’m asking myself. This is what the Ukrainians all over the world are asking themselves. And this is why we…

CAVUTO: And you want Russia out, period, right?

RUDIK: Absolutely.

CAVUTO: This idea where they annex some of the eastern lands and all that, they got to go.

RUDIK: Of course they got to go.

We are sovereign country. We are free democratic state. And we are protecting what is ours.

CAVUTO: So, these Russian-aligned eastern province, they just got to get with it, this is all Ukraine, only Ukraine?

RUDIK: Yes. This is simple as that.

CAVUTO: Got it. All right.

Kira, so good seeing you. Continued good health. You’re remarkable, as are her entire people, never giving up. And she’s right to raise every single example she just did. When people said, it wouldn’t — it wouldn’t be very long for the Russians to take over the country, everything would evaporate, Putin would come out in charge of everything, it never happened that way.

General Jack Keane on what happened and why that happened, because the general, pretty much like Kira, said, never give up the fight — after this.

(COMMERCIAL BREAK)

CAVUTO: Donald Trump says it’s just the latest witch-hunt, New York’s attorney general going after his business practices actually going back more than a decade. Is there anything there?

We’re on it — after this.

(COMMERCIAL BREAK)

CAVUTO: All right, Vladimir Putin is reaching out to get more soldiers, calling up another 300,000 reservists. That has not happened in that country for decades. And that’s on top of the 137,000 additional soldiers he sort of culled from pretty much all over the world, wherever they were, to get to Ukraine, and fast, to fight the good fight.

But that good fight is, well, not going so good or well for Russia and Vladimir Putin. And he looks desperate. But by also using a nuclear option or saying he’s open to one, is that desperation getting really dangerous and scary??

General Jack Keane back with us. Always learn a lot talking to the general. Kind enough to join us.

So, General, you often remind me, sir, about a leader who’s trapped, a wounded animal in a corner can lash out in all sorts of ways, but clearly sending a signal to engulf the rest of the world with him.

What do you make of it?

GEN. JACK KEANE (RET.), FOX NEWS SENIOR STRATEGIC ANALYST: Well, I think mostly the threat of the nuclear weapons is about fearmongering.

I mean, what he’s attempting to do is — clearly, I mean, he’s losing this war. It doesn’t mean he’s going to lose it. There is certainly is an opportunity for the Ukrainians to inflict that on him. And they do have the momentum. And that’s all good.

And, suddenly, what he wants to do is cut off the support. He knows that the support that they have received, particularly from the United States, but also from the U.K. and other countries, has actually been quite decisive in helping the Ukrainians achieve this operational momentum.

And when everybody talks about, well, it’s part of the DNA for them to use tactical nuclear weapons if they’re fighting a war, well, that scenario is when they’re fighting a war against a superpower like the United States.

Here’s — we have to unpack this a little bit, so it makes sense to the American people, in terms of what the consequences are. First of all, militarily, one tactical nuclear weapon would not do the kind of damage, I think, Putin would want to do to the Ukrainian forces and the disposition of the people as well.

But, politically, probably one would be sufficed. But what would be the consequences of that? Well, first of all, they have to deal with the radiation themselves, Russian forces on the ground, and possibly the Russian — the Russian people themselves. And so that is a terrible consequence for them.

The second thing is, a nuclear weapon exploded in Ukraine, in Europe almost guarantees that the United States would enter the war, as would NATO. And, listen, that means, for a fact, Putin loses. There’s no doubt. If the United States came in unilaterally, he loses. We wouldn’t put 400,000 or 500,000 troops in there.

CAVUTO: But he has to — well, how does this end, then, General? How does it end?

If you think about it, his options are few, but he can’t leave without something, right? And I just talked to a Parliament member here, who said he’s not leaving with any of our land, that’s for sure. He’s not leaving sort of taking these eastern provinces and making them his own. That’s not happening.

So what does he go back to show the Russian people for all of this?

KEANE: Yes, so I think where his head is now, I mean, after the Donbass region, he wasn’t able to be completely successful there, or only about 40 percent successful.

After this successful counteroffensive, he knows full well that he — this war doesn’t end in weeks or months, that he’s in a protracted war, and that — he’s playing for the long game, Neil.

CAVUTO: Yes.

KEANE: What he wants is wear and tear on the Ukrainian people. And you have discussed this yourself.

They get worn down by these casualties to their forces, loss of life to their families. The second — the second thing — and he’s also counting on the Europeans and even the United States, but mostly the Europeans, also to get worn down, energy crisis this coming winter, economic issues, inflation, all of that taking its toll. He wants to see Europeans in the streets protesting.

CAVUTO: Some of them are, General. Some of those European countries are. They’re tired of it.

KEANE: Well, there’s no doubt.

CAVUTO: Yes.

KEANE: And, listen, the Germans and the French have never been in this thing, Neil.

So he sees all of that. He’s playing for the long game here. And that’s what he wants. And I still think, in his mind, he can still take much of that southern coast and call it a day at some point through negotiations as a result of. That, I think, is kind of an endgame.

We can only speculate. But the idea of him using a nuclear weapon and the consequence of him — that war expanding, and guaranteeing him a loss then, I think that’s remote.

CAVUTO: All right.

KEANE: And, certainly, it’s a possibility because he’s thrown it out there. But I think it’s largely fearmongering.

CAVUTO: Let us hope so.

General, always great seeing you. Thank you, General Jack Keane, served this country with great honor and distinction as well.

All right, the buses just keep on coming right now, those migrants arriving in New York again. The numbers are getting pretty eye-popping here, but a reminder from Republicans following all this and hearing all the criticism, well, that criticism isn’t fair and balanced — after this.

(COMMERCIAL BREAK)

CAVUTO: All right, back to the border, more buses from the border making their way to New York City.

Of course, this has been the drill lately, where a lot of people are complaining in these sanctuary cities of all the buses coming to them and planes, in the case of Martha’s Vineyard, and a legal battle back on that.

Alexis McAdams with the latest from Eagle Pass — Alexis.

ALEXIS MCADAMS, FOX NEWS CORRESPONDENT: Hi, Neil.

Well, a lot of people are talking about the migrants that were in Martha’s Vineyard. But, really, this is the epicenter of that migrant crisis. Right here behind me, you can see the Rio Grande River. We’re talking thousands of migrants every single day crossing that border.

And we saw it again this morning. Take a look here on your screen. This is just the latest group our cameras caught up with right out here in Eagle Pass, Texas, at least 200 people crossing the Rio Grande River into the United States now being processed by Border Patrol agents, who have to leave patrols to do all of that paperwork.

This comes as sources tell FOX News that, for the first time ever, the Del Rio Sector has surged past the Rio Grande Valley, clocking in more than 463,000 migrant encounters this year. It’s not just people crossing on foot. Smugglers are also out in full force on Texas highways. Take a look here, this guy posing as a driver for a moving company here in Texas busted after investigators found nearly a dozen migrants hiding in the back of that truck. Watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Oh, man, no good. All right, you go and put your hands behind your back for me.

(END VIDEO CLIP)

MCADAMS: And he was taken into custody pretty quickly, Neil. And that’s kind of the same situation out here for a lot of these drivers trying to get through.

Now, as migrants pour into the United States, agents tell us it’s difficult to know who even has a criminal record or who these people are in the first place. Just this month, agents arrested a Mexican citizen convicted of third-degree sex assault out in Connecticut. That’s the mug shot of Hilario Martinez-Ruiz there. Ruiz was deported back in 2015, but spotted by border cameras this month, arrested and will be deported again.

Now, take a live look the FOX drone team camera right now. This is the look from the sky along the Rio Grande River, where all this action happens here day by day. Officials say most of the migrants are coming in from Venezuela, Nicaragua and Cuba, not so much Mexico anymore, which is important to point out.

This morning, about 60 people from Nicaragua were in that group that ended up here in Eagle Pass.

And back out here live, Neil, I can tell you that people we have talked to who are coming up and talking to us just here because they live pretty close by and they want to see the action here come up and talk about, when is the federal government going to step in and when is the president going to show up to Eagle Pass?

Because he wouldn’t have to be here for very long to see those migrants pass in. And another piece of news that we just got in just a few minutes ago, Neil, is that the governor of Texas, Greg Abbott, issued an executive order just about an hour ago designating Mexican drug cartels as terrorist organizations, pointing to that threat of fentanyl that’s killing so many Americans every single day, Neil.

CAVUTO: All right, thank you very much, Alexis McAdams in Eagle Pass on all of that.

Other developments we’re focusing on today included a legal issue for one Donald J. Trump, New York’s attorney general looking at how he and his family ran the Trump Organization and all of those businesses over the better part of a decade, to say there was a lot of inflated rigging of real estate properties and liabilities that oftentimes were understated.

Suffice it to say, it’s a legal mess and, to hear the former president tell it, yet another witch-hunt.

Let’s go to David Lee Miller with more — David Lee.

DAVID LEE MILLER, FOX NEWS CORRESPONDENT: Neil, New York’s Attorney General Letitia James has filed a civil lawsuit that, if successful, could prevent the former president and three of his children from continuing to run their real estate empire here in New York state.

According to the filing, Mr. Trump, his son Don Jr. and his son Eric, along with daughter Ivanka, fraudulently inflated the value of several properties by billions of dollars. The lawsuit says Trump exaggerated the size of his New York City triplex apartment. He claimed his Trump Tower condo was 30,000 square feet, when, in actuality, according to the suit, it was just under 11,000, also fraudulently inflated, according to the lawsuit, property on Wall Street.

While an independent appraiser said it was worth $220 million, Trump claimed its value was 530, and attributed that higher value to the appraiser. Also cited is Mar-a-Lago. Trump valued that property at $735 million. The A.G. says it’s worth about $75 million.

Now, the attorney general says inflating property value resulted in numerous financial benefits.

(BEGIN VIDEO CLIP)

LETITIA JAMES, NEW YORK ATTORNEY GENERAL: Mr. Trump and the Trump Organization repeatedly and persistently manipulated the value of assets to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company.

(END VIDEO CLIP)

MILLER: Responding to the lawsuit, the former president posted on social media.

The post reads in part: « Another witch-hunt by a racist Attorney General Letitia James, who failed in her run for governor, getting almost zero support from the public.

The post then continues: « I never thought this case would be brought until I saw her really bad poll numbers. She’s a fraud who campaigned on a get Trump platform, despite the fact that the city is one of the crime and murder disasters of the world under her watch. »

Now, what he’s referring to is that Letitia James, a Democrat, is up for reelection this fall. Now, the attorney general is calling for $250 million in restitution, plus banning Trump and his family from serving as directors or officers at any New York-based corporation. Additionally, Mr. Trump, if the suit is successful, would not be allowed to take part in commercial real estate deals for five years.

Now, while this is a civil lawsuit, the attorney general says she believes it’s possible that federal laws were violated and she’s going to refer the matter to the U.S. attorney for the Southern District, as well as the IRS. She calls the pattern of alleged fraud astounding — Neil.

CAVUTO: Just incredible.

David Lee, we will look at where this goes and the possibility of criminal charges being filed, but a distinction with what the attorney general was saying was that that might be filed along with the IRS and have them look into it and their Criminal Division, but it gets kind of complicated.

And, as I often say, Tom Dupree, he’s the guy who gets complicated and translates it back into English, the former deputy assistant attorney general.

Tom, they’re already saying timing is everything. Others have looked at the same issue and not done anything. She has a political agenda. To be fair to the attorney general, she gets fair and balanced hate mail. After all, Governor Cuomo in New York is out of his job because of that, and none too pleased with her.

Where do you think this goes?

TOM DUPREE, FORMER JUSTICE DEPARTMENT OFFICIAL: Yes, well, Neil, a few interesting things about today’s filing.

For one thing, it’s super long. It’s much longer than I anticipated. I mean, the complaint itself is over 250 pages.

CAVUTO: Wow.

DUPREE: And it puts a lot of evidence in there — I should say allegations. We will see if she can back it up with evidence.

One interesting thing here, Neil, is that she’s pursuing civil charges. If she had brought a criminal case against the former president, she would have had to prove her claims beyond a reasonable doubt, which is the highest standard of proof known in American law.

She doesn’t have to meet that burden because this is just civil, although, as the reporter just noted, she is trying to start up some interest among prosecutors by making a criminal referral to the federal prosecutors in New York, as well as to the IRS.

CAVUTO: But she could start out that way, and she didn’t, sort of like a jump ball and threatening that. And so does it lose its impact?

DUPREE: It might lose its impact a little bit.

In other words, look, federal prosecutors and the IRS, I mean, they get referrals fairly often. And just because they get a referral doesn’t mean they’re going to act on it. And I think would be a fair question for them to say, well, why didn’t you bring the criminal case? Why are you giving this to us?

CAVUTO: Right.

DUPREE: And, I mean, it’s possible, there could be laws that she doesn’t have jurisdiction to enforce and it gets kind of complicated.

But, to your point, she made the decision to go to civil route. She’s basically trying to ban President Trump and his family members from running businesses in New York in the future. She’s not, at least at this stage of the game, trying to put them in jail.

CAVUTO: But can she do that? You just read my mind. That’s one thing.

Forget about the Trump Organization if this follows through: We don’t think it’s a good idea for you or your family to do any business with any company, your own or others, in New York, in perpetuity. That seems like a bit of a leap.

DUPREE: Well, what she’s going to have to do is prove that all the family members had personal involvement in this scheme, right? In America, you don’t have guilt by association.

Just because you belong to a family that owns a company that did something wrong doesn’t mean that you personally are to be banned from doing business.

CAVUTO: That they — the charge is that they were cooking the books and inflating values. And that’s just a no-no, if they can prove that, right?

DUPREE: If they — she can prove it. That’s exactly right.

CAVUTO: Yes.

DUPREE: If she can prove it. And she is going to have to link each of those individuals to this fraudulent scheme if she wants to impose the kind of sanctions that she’s contemplating.

CAVUTO: Yes, very tough to do, forget — for any company, but let alone real estate trusts and companies have transactions that can change on days and weeks. That’s a business leap.

We will see what happens. Tom, thank you so much.

DUPREE: Thank you, Neil.

CAVUTO: All right, Tom Dupree.

Speaking of banks, some of the heads of the biggest on the planet were on Capitol Hill today. They were supposedly witnesses giving testimony. It had the feeling of being more like pinatas getting hit hard.

(BEGIN VIDEO CLIP)

JAMIE DIMON, CHAIRMAN, J.P. MORGAN CHASE: Can I just add one other thing? I don’t think…

REP. BRAD SHERMAN (D-CA): Not on my time, you can’t.

DIMON: No one is doing…

BERMAN: Reclaiming my time, Mr. Dimon.

REP. MAXINE WATERS (D-CA): The time belongs to the gentleman from California.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

CAVUTO: Financial CEOs on Capitol Hill, bank on trouble, literally.

Chad Pergram, what happened?

CHAD PERGRAM, FOX NEWS SENIOR CAPITOL HILL PRODUCER: Hey there, Neil.

Sobering economic news from the nation’s leading bankers appearing on Capitol Hill today. Jamie Dimon of J.P. Morgan Chase said that lawmakers should be prepared for the worst. He fretted about geopolitical crises.

(BEGIN VIDEO CLIP)

DIMON: The real issue is global stability relating to Ukraine and China and kind of more forward-looking.

The financial industry here could easily handle a hard landing.

(END VIDEO CLIP)

PERGRAM: Of course, the Fed is trying to navigate a soft landing with today’s interest rate increase.

In June, Dimon told lawmakers to expect what he termed an economic hurricane. There’s lots of introspection about how Congress and policymakers responded to the pandemic, infusing the economy with trillions in cash. Dimon testified that the response was the right call initially.

(BEGIN VIDEO CLIP)

DIMON: We’re paying the price of too much fiscal monetary stimulus. I don’t want to second-guess all the people doing that. That might have been predictable at the time. They’re taking the right action to reverse it.

But I don’t think you can spend $6 trillion and not expect inflation.

(END VIDEO CLIP)

PERGRAM: Despite Dimon’s testimony about global instability, he tangled with Democrat Brad Sherman about J.P. Morgan and links to Russian oil.

(BEGIN VIDEO CLIP)

SHERMAN: Have you cut the ties to Gazprom and Vitol?

DIMON: We are following the instructions of the American government, as they asked us to do it. I think they’re doing a great job.

SHERMAN: So, you are not — Mr. Dimon, it’s a yes-or-no question. You have not cut your ties to the Gazprom and Vitol?

(END VIDEO CLIP)

PERGRAM: Bank profits are down because of geopolitical challenges and interest rate hikes. Megabankers appear before a Senate hearing tomorrow — Neil.

CAVUTO: All right, that went well, Chad.

Thank you very much, Chad Pergram on Capitol Hill.

When we come back: the great exodus from New York to Florida, why it’s on and gathering steam — after this.

(COMMERCIAL BREAK)

CAVUTO: All right, the cover of The New York Post today showing record number of New Yorkers moved to Florida in August, and that pace is picking up steam.

Doesn’t Ashley Webster know it? He’s been talking about this. Madison Alworth has been following the implications of this. They both join us now.

So, Ashley, the bottom line is…

ASHLEY WEBSTER, FOX BUSINESS CORRESPONDENT: Yes.

CAVUTO: … it’s folks just seeking out lower-tax, lower-crime, lower- hassle domain.

WEBSTER: Yes.

CAVUTO: And Florida is the winner, right?

WEBSTER: Yes, it’s interesting. When the pandemic first started, it was the billionaires, followed by the millionaires, followed now by the middle class, especially young parents, who are concerned about the crime in New York, New York City in particular, and the state of the schools

And that flow of people has not slowed down.

CAVUTO: You know, Madison, I’m just wondering, does it pick up steam?

Because this number looked at people who swapped licenses. In other words, they just didn’t go down to Florida to get a second home or vacation. Thousands of individuals — and this is thousands every month — are saying, no, I’m moving out. And I’m applying for a license in Florida. And I’m never going back.

MADISON ALWORTH, FOX NEWS CORRESPONDENT: I mean, it definitely does indicate that permanent change, because, if you have ever been to the DMV, that’s not something you do for fun, right?

So these are people who are there, and they’re there to stay. And it makes sense, because we have opened up with remote work. And I think the pandemic showed you can leave, and people have chosen to do that. I mean, summer in New York, it’s the smell of hot garbage. Summer in Florida, it’s really, really hot. So, both are tough. Both are tough.

(LAUGHTER)

CAVUTO: It’s just really hot. It is very hot, yes.

ALWORTH: Yes, but I would choose extreme heat over that floral New York summer smell.

CAVUTO: Well, Madison, you should go with Ashley to the DMV there, because they just put him right in the front of the line.

(LAUGHTER)

CAVUTO: But you always wonder, Ashley, the same transplants from New York changed the complexion of Florida. Everyone becomes an awful driver. No offense to Floridians. But what happened?

(LAUGHTER)

WEBSTER: Yes, it’s interesting, isn’t it?

And, listen, there are going to be some people who turn around and go back. But, to Madison’s point, what isn’t to like? It’s the business-friendly atmosphere. The economy is booming. There are plenty of jobs. There’s a very — there’s no state income tax, a very low corporate tax rate of 5.5 percent.

You put all of those things together, you can put up with a hot and sweaty summer, because you have got the great beaches to go to. I don’t see many people turning around. I think the move is a lot more permanent than it used to be in the past.

CAVUTO: Madison, don’t get any ideas. We like you here in New York. But you can see the appeal, right?

ALWORTH: I mean, absolutely.

So I actually lived in Florida before I took this job. I think the appeal of New York, the work opportunities, thank you, at FOX News, FOX Business, for moving me from Florida to New York.

But I think unless we really see that return to office, people can get the opportunities of New York or of the Northeast in Florida.

CAVUTO: Very true.

ALWORTH: So I would choose that sunshine if I could. I just love this job, and so I’m stuck again with that lovely garbage smell.

But I have no regrets.

(LAUGHTER)

CAVUTO: But, real quickly, Madison, then could you let Ashley know where you got your start in New York to try to learn the ropes, so to speak?

ALWORTH: Yes. Yes. I started here on this show as an intern.

CAVUTO: Oh. See that, Ashley?

ALWORTH: So, had to come back, Neil.

WEBSTER: Wow.

CAVUTO: Well, that’s what we call power.

WEBSTER: Great story.

CAVUTO: All right, guys, very good seeing you.

We will just see what happens. But you go where you don’t have to put up with the grief.

Here’s « The Five. »

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