Fed Holds Rates Steady Despite Trump's Wishes and GDP Rebound, Khalil Legal Showdown: AM Update 7/31

Summary

The Megyn Kelly Show: Comprehensive Summary of Episode Released on July 31, 2025

Episode Title: Fed Holds Rates Steady Despite Trump's Wishes and GDP Rebound, Khalil Legal Showdown: AM Update 7/31
Host: Megyn Kelly
Platform: SiriusXM
Duration: Approximately 17 minutes

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1. Federal Reserve's Decision to Maintain Interest Rates

At the outset of the episode, Megyn Kelly introduces the central economic dilemma: the Federal Reserve's (Fed) decision to keep interest rates unchanged despite significant pressure from former President Donald Trump. This decision arrives in the wake of robust GDP growth figures that exceeded market expectations.

• Donald Trump voices his frustration, stating at [00:30]:

  "We should be the lowest rate and we're not."

• Jerome Powell, Federal Reserve Chair, explains the rationale behind maintaining the current interest rate, as highlighted at [02:30]:

  "The Federal Open Market Committee decided to leave our policy interest rate unchanged. We believe that the current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments."

However, this stance has not gone without criticism. Margo Cleveland, an investigative journalist at the Federalist, comments on the internal dissent within the Fed:

"Not one, but two members of the Fed's powerful Board of Governors voted in favor of an interest rate cut... This is the first time we're seeing two governors dissent since 1993." ([02:56])

2. President Trump's Response to the Fed's Decision

In direct response to the Fed's announcement, Donald Trump takes to the Oval Office to express his dissatisfaction. At [03:28], he declares:

"And we should be lowering the rates. You know, each point that this gentleman keeps up costs us $365 billion a year... We should be the lowest interest rate. And we're not."

Trump further criticizes Jerome Powell's management of the economy, juxtaposing it with Europe's aggressive rate cuts:

"But Europe... cut their rates 11 times in the last short period of time. But the good news is we're doing better than anybody anywhere in the world." ([04:17])

3. Robust GDP Growth Amidst Rate Stability

Despite the Fed's decision, the U.S. economy showcases resilience. New GDP data released shows a 3% growth in the second quarter, surpassing expectations and rebounding from a slight contraction in the first quarter. Kevin Hassett, Director of the National Economic Council, praises the economic indicators:

"It's really one of the best GDP announcements or releases that you could imagine because there's blockbuster growth, way above expectation... inflation... down to 2.1%, which is the Fed's target." ([04:35])

Powell adds context by highlighting the simultaneous reduction in tariffs and government downsizing:

"... all of this happened while $127 billion in tariffs was raised, which is clearly not harming the American consumer and we've been downsizing government in order to be more fiscally responsible." ([04:35])

4. The Legal Showdown: Mahmoud Khalil's Deportation Battle

A significant portion of the episode delves into the complex legal battle surrounding Mahmoud Khalil, a Columbia University student facing deportation under the Trump administration. Khalil's case has garnered substantial media attention and ignited debates over immigration policies and judicial overreach.

Background of Khalil's Case: Khalil, an Algerian citizen with a student visa and a green card, became the target of an ICE arrest following allegations that he was involved with the Columbia University apartheid divest group, which purportedly sympathizes with organizations like Hamas. The Trump administration argues that Khalil poses a threat to U.S. foreign policy interests, leading to his attempted deportation under specific legal grounds.

Legal Proceedings and Judicial Challenges: The case took an unexpected turn when a federal district court judge in New Jersey overstepped his jurisdiction by attempting to influence ongoing immigration proceedings in Louisiana. Margo Cleveland elaborates on the judicial missteps:

"There's a normal process by which immigration cases are decided... but the district court judge is acting completely beyond his jurisdiction." ([09:31])

In response, the Trump administration has appealed to the 3rd Circuit Court of Appeals, asserting that the New Jersey judge exceeded his authority ([11:12]). Cleveland predicts a favorable outcome for the administration but notes that Khalil's deportation remains a protracted process:

"His deportation is still a long way off in the future." ([11:53])

Implications of the Case: Cleveland emphasizes the broader ramifications, pointing out that Khalil's case is emblematic of a larger issue where immigration cases are improperly brought before federal district courts, disrupting the established legal framework.

Khalil's Counteractions: In retaliation, Khalil has initiated a $20 million damages claim against the Trump administration, alleging false imprisonment and defamation. His legal team argues that his detention and the allegations against him are unfounded.

Media Interactions: Khalil has been actively engaging with various media outlets to defend his position. A notable moment occurred during a CNN interview where Khalil was pressed on his stance regarding Hamas. At [14:24], he responds:

"I condemn the killing of all civilians... it's disingenuous to ask about condemning Hamas while Palestinians are the ones being starved now by Israel." ([14:50])

This response has drawn further scrutiny, with critics arguing that his inability to unequivocally condemn Hamas undermines his case.

5. New York City Mayoral Candidate Zoran Mamdani's Call for Gun Control

Shifting focus to local politics, the episode covers Zoran Mamdani, the far-left socialist candidate for New York City Mayor, who has recently called for enhanced gun control measures in the aftermath of a tragic mass shooting in Midtown Manhattan. The event resulted in the loss of one NYPD officer and three civilians, with another civilian critically injured.

Mamdani's Position: In his public statement, Megyn Kelly reports Mamdani's advocacy for stronger gun laws:

"We are reminded that no matter how strong our gun laws are in this state, we are only as safe as the weakest laws in this nation... to put forward a vision of stronger gun laws." ([17:10])

He aligns his stance with Governor Hochul's call for a nationwide assault rifle ban, positioning himself as a proponent of both police defunding and comprehensive gun regulation.

Public and Political Reaction: Mamdani's call has sparked backlash, especially given his past statements advocating for police defunding. Critics highlight a perceived hypocrisy, referencing his previous tweet in response to a police officer's emotional moment:

"Nature is healing." ([16:35])

Polls and Election Outlook: A recent Zenith Research poll indicates Mamdani holds a commanding lead in the mayoral race, securing 50% support among likely voters, with Andrew Cuomo trailing at 20.2%, Curtis Lewa at 13%, and incumbent Eric Adams at 7%. Notably, Mamdani enjoys significant support among younger and Jewish voters, with 82% approval among those aged 18-34 and 67% among Jewish voters aged 18-44.

Implications for the Election: As the November 4th election approaches, the impact of the Midtown shooting and Mamdani's response could play a pivotal role in shaping voter sentiment. The episode underscores the tension between public safety concerns and political agendas surrounding gun control and law enforcement funding.

6. Conclusion and Upcoming Segment Tease

In wrapping up the AM update, Megyn Kelly reiterates the intertwined nature of economic policies, immigration law, and local politics, emphasizing their collective impact on the American socio-political landscape. She previews upcoming discussions, including an interview with Glenn Greenwald, positioning listeners to stay informed on these critical issues.

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Notable Quotes with Timestamps:

• Donald Trump on interest rates: [00:30]

  "We should be the lowest rate and we're not."

• Jerome Powell on Fed policy: [02:30]

  "The Federal Open Market Committee decided to leave our policy interest rate unchanged..."

• Margo Cleveland on Fed dissent: [02:56]

  "Not one, but two members of the Fed's powerful Board of Governors voted in favor of an interest rate cut..."

• Donald Trump criticizing Powell: [03:28]

  "He's done a bad job..."

• Kevin Hassett on GDP and inflation: [04:35]

  "It's really one of the best GDP announcements or releases that you could imagine..."

• Mahmoud Khalil on CNN: [15:02]

  "I simply... ask and protested the war in Palestine."

• Margo Cleveland on judicial overreach: [09:31]

  "There are a lot of different machinations going on with the court in New Jersey and the immigration proceedings in Louisiana."

• Zoran Mamdani on gun laws: [17:10]

  "We are only as safe as the weakest laws in this nation."

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Summary

This episode of The Megyn Kelly Show offers a multifaceted exploration of pressing national issues, including the Federal Reserve's pivotal interest rate decision amidst economic growth, the contentious legal battle surrounding Mahmoud Khalil's deportation, and the dynamic landscape of New York City's mayoral race in the context of recent violence and policy debates. Through incisive interviews and expert analysis, Megyn Kelly provides listeners with a comprehensive understanding of how these events interconnect and shape the current socio-political environment.

Transcript

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[Megyn Kelly]

Good morning everyone. I'm Megyn Kelly. It's Thursday, July 31, 2025, and this is your AM update.

[Donald Trump]

We should be the lowest rate and we're not.

[Megyn Kelly]

Federal Reserve Chair Jerome Powell meeting heavy pushback on his decision to keep interest rates steady as the latest GDP numbers surpass expectations.

[Margo Cleveland]

I really can't even express how bonkers it is. You've got the immigration stuff and then you've got a normal case. But the normal case is messing with the immigration case.

[Megyn Kelly]

Why can't the Trump administration boot Columbia student agitator Mahmoud Khalil out of country? The will have a full report. And New York City mayoral candidate Zoran Mamdani calls for more gun control in the wake of the Midtown Manhattan mass shooting. Is that the answer? All that and more coming up in just a moment on your AM Update. A lot of people worry about the online platforms and which one to trust for your general online news source.

[Margo Cleveland]

Right.

[Megyn Kelly]

They don't know most of them are left and you can't trust them. Some are right, but you know, you don't want to be manipulated against righties who, like hate Trump, for example. And this is where Ground News comes in. This is an important app you need to know about right now. Unlike other platforms amplifying or suppressing certain narratives to shape your worldview, this is an independent platform pulling in perspectives from across the political spectrum to show you the truth. Mainstream media will not with more context than you will find in virtually any other place. I see your comments. I know you're worried about immigration, the economy, simply finding the truth missing from your online feeds. Well, Ground News is here to help. Right now you can get 40% off their vantage plan. That's five bucks a month when you go to groundnews.com Megan that's G R O U N D news.com Megan ground news helps you think freely and hold the powerful accountable. On Wednesday, Federal Reserve Chair Jerome Powell, bucking the president's intense public pressure campaign, opting not to reduce federal interest rates.

[Advertiser]

In support of our goals today, the.

[Jerome Powell]

Federal Open Market Committee decided to leave Our policy interest rate unchanged. We believe that the current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments.

[Megyn Kelly]

That decision facing backlash not just from the Trump administration, which argues the positive economic trends justify lowering rates, but also from fellow members of the Fed's Board of Governors. CNN reporting on the internal split.

[Kevin Hassett]

Not one, but two members of the Fed's powerful Board of Governors. They voted in favor of an interest rate cut. Sometimes we do see one governor dissent, but this is the first time we're seeing two governors dissent since 1993. And it does show how Fed Chair Powell, he's not just facing pressure from the White House to cut interest rates. He's also facing pressure from some of his colleagues inside this building.

[Megyn Kelly]

President Trump Wednesday from the Oval slamming Powell's decision.

[Donald Trump]

And we should be lowering the rates. You know, each point that this gentleman keeps up costs us $365 billion a year. Think of that one point. $365 billion. We should be the lowest interest rate. And we're not. We're 38. Number 38 because of the Fed. It's all because of the Fed. He's done a bad job. Now. He's got a meeting today, but I hear they're going to do it in September, not today, for what reason, nobody knows. But Europe, as you know, cut their rates 11 times in the last short period of time. But the good news is we're doing better than anybody anywhere in the world. Nobody's doing anything even close to us, even with the higher rates. The higher rates do affect housing, though, because people can't go out and get a loan or refinance their house.

[Megyn Kelly]

The announcement coming just hours after the release of new data showing GDP grew 3% in the second quarter, beating expectations and marking a rebound from the first quarter when economic activity slightly shrank. Director of the National Economic Council, Kevin Hassett, over the moon about the latest numbers.

[Jerome Powell]

It's really one of the best GDP announcements or releases that you could imagine because there's blockbuster growth, way above expectation. And there's also a real, real almost collapse in inflation. It went down by about a percent and a half, all the way down to 2.1%, which is the Fed's target. And so to have high growth with low inflation and also high income growth, personal income growth was 3%. That's just like about a sweet spot for a GDP release. And I will add that all of this happened while $127 billion in tariffs was raised, which is clearly not harming the American consumer and we've been downsizing government in order to be more fiscally responsible. 70,000 federal jobs have been reduced at 5%. There was a 5% reduction in federal government spending while all this was going on.

[Megyn Kelly]

Coming up, Columbia University student agitator Mahmoud Khalil has become a media darling. But what is he still doing here? And far left socialist candidate for New York City mayor Zoran Mamdani uses the MIT town Manhattan shooting to call for more gun control. Let's be honest, America can still be a dangerous place and you cannot afford to wait for help. Sure, you could use a firearm, but in today's America, defending yourself with deadly force could have legal consequences. According to FBI data, 99.9% of all altercations do not require lethal force. That's exactly why so many are turning to Byrna. Byrna is proudly American hand Assembled in Fort Wayne, Indiana, these less lethal self defense launchers are trusted by hundreds of government agencies, law enforcement departments and private security companies. Over 600,000 Byrna pistols have been sold already, most to private citizens who just refuse to be victims. Byrna launchers fire rock hard kinetic rounds and powerful tear gas and pepper projectiles capable of stopping a threat from up to 60ft away. No background checks, no waiting periods and burner can ship straight to your door. Take responsibility. Protect your future. Visit Burna.com right now or your local sportsman's warehouse. That's by R N A.com or your local sportsman's warehouse. Visit now and be prepared to defend Mahmoud Khalil, the Columbia University student agitator and Algerian citizen at the center of a high profile deportation fight. With the Trump administration hitting the media circuit, enjoying the spotlight since his release from ICE custody in June, wasn't this guy deported? ICE officials arresting Khalil, who has a student visa and a green card. In March, the Trump administration seeking to remove him under a law that states, quote, an alien whose presence or activities in the US The Secretary of State has reasonable ground to believe would have potentially serious adverse foreign policy consequences for the United States is deportable. Secretary of State Marco Rubio making that determination about Khalil given his role in the Columbia University apartheid divest group. Khalil worked as a student negotiator for that organization, which reportedly sympathizes with terror groups like Hamas and Hezboll calling for the end of Western civilization. This as it occupied Columbia's campus, setting up an encampment and seizing academic buildings, demanding the university cut ties with Israel or else the State Department also arguing Khalil was dishonest on his visa application, accusing him of omitting past work with the Hamas linked UN Relief and Works Agency in order to secure his green card in the first place. Khalil's ICE arrest kicking off a multi front legal battle as the government tries to deport this guy and his team of lawyers pretend he has a legal right to stay here. Following his arrest, the DOJ transferring Khalil to an ICE detention center in Louisiana to await deportation. Khalil's legal team filing a separate case called a habeas corpus petition in a federal district court in New Jersey. That case was assigned to the Biden appointed Michael Farbiage. A habeas proceeding challenges one's detention. This federal judge then ordering Khalil's release as his habeas case plays out. In addition, Judge Farbiaz attempting to rule that the immigration judge cannot deport Khalil based on Secretary Rubio's finding that Khalil is hurting US Foreign policy, which is an extraordinary ruling in that Khalil's deportation is up to the immigration courts. The federal district court should only be considering whether he's being properly detained. In the meantime, investigative journalist at the Federalist, Margo Cleveland, who has been closely tracking this story, walks us through this legal morass.

[Margo Cleveland]

So you have the New Jersey judge whose lawsuit only involved a claim called habeas corpus, which dealt with whether he's detained or not. And you have that New Jersey judge now telling an immigration judge how to do his job. I really can't even express how bonkers it is. And kind of the simple way to think of it is they're two totally separate cases. There is a normal process by which immigration cases are decided. It starts with the case going to an immigration judge for from there it goes to the Board of Immigration Appeals, and from there it goes to a circuit court, not a district court. His attorney spent one running back to the district judge in New Jersey who has no power over immigration cases and asked the judge to enter a revised preliminary injunction. And what the judge did is ordered the Trump administration to go to the immigration judge and say you have to change your ruling. So as you can see, there are a lot of different machinations going on with the court in New Jersey and the immigration proceedings in Louisiana. But the bottom line is that the judge in New Jersey is acting completely beyond his jurisdiction and entering orders dictating what another judge, the immigration judge, can and cannot do. Congress has prohibited that.

[Megyn Kelly]

In response, the Trump administration filing an appeal with the 3rd Circuit Court of Appeals arguing this New Jersey district judge is way out of bounds.

[Margo Cleveland]

There is no way that this New Jersey judge will be allowed to micromanage the immigration proceedings that are ongoing in Louisiana. That is so far beyond his authority and authority that Congress expressly limited. So I think the Trump administration is very likely to win because they're right. Just for the same reason that the Supreme Court has stayed and given Trump a victory In I think 12 of the 13 cases.

[Megyn Kelly]

But even if the third circuit sides with the Trump administration, Cleveland says Khalil's deportation is still a long way off.

[Margo Cleveland]

So right now it's at the immigration stage, at the IG stage. Then it goes to a Board of Immigration Appeals and then it goes to the 5th Circuit. And from the 5th Circuit he could seek to go to the Supreme Court. So this case and his deportation is very far off in, in the future. Now, the reason that his attorneys are fighting so hard is because they don't think they're going to win for the immigration case because immigration courts have discretion that is very hard to challenge on appeal.

[Megyn Kelly]

Cleveland saying this case is likely to have major ramifications on immigration proceedings besides Khalil's.

[Margo Cleveland]

So this case is actually just one of many involving immigration proceedings that are wrongly being brought in federal district courts. We are seeing virtually every immigration case that would typically go through the process Congress set up, which is immigration judge, Board of Immigration Appeals, circuit case instead being brought in district courts. That is a huge problem. And in fact that's why Congress said that district court judges do not have jurisdiction because it slows down this process. This case provides an opportunity for the federal appellate courts to make clear when and when the district courts do not have the power to wade into immigration issues.

[Megyn Kelly]

As all of that drama plays out, Khalil now filing a claim seeking $20 million in damages against the Trump administration, which means the federal taxpayers, which could potentially lead to another lawsuit claiming he was falsely imprisoned and smeared as an anti Semite. In recent weeks, Khalil launching a full blown media blitz, appearing across several friendly outlets, fielding questions from a typically fawning media. However, in mid July, one CNN interview going slightly off the rails when Khalil was asked a very simple question.

[CNN Reporter]

Just to be clear here though, do you specifically condemn Hamas, a designated terrorist organization in the United States, not just for their actions on October 7th?

[Mahmoud Khalil]

I condemn the killing of all, of all civilians, full stop. And but what I don't want to get into is as, no, I'm very clear with, with condemning all civilians. I'm very, I'm very straight in my position in that and that part. But it's, it's disingenuous to ask about condemning Hamas while Palestinians are the ones being starved now by Israel.

[CNN Reporter]

But it is fair to ask you about whether you condemn Hamas because the Trump administration has claimed that you are a Hamas sympathizer. So it's very important to actually ask that question in this broad conversation.

[Mahmoud Khalil]

Yeah, I simply, I simply ask and protested the war in Palestine.

[Megyn Kelly]

Doesn't seem like a hard question. Guess it was. The State Department says that answer should be disqualifying for a green card in and of itself. Professor Cleveland agrees.

[Margo Cleveland]

I think that's pretty telling. And America should not be admitting people into the United States who will refuse to acknowledge a terrorist organization is a terrorist organization. That, to me, should be a very standard way to screen out individuals who will harm the foreign policy interests of the United States.

[Megyn Kelly]

Democrat nominee for New York City Mayor Zoran Mamdani speaking publicly for the first time following the Monday mass shooting in a midtown Manhattan skyscraper. One NYPD officer and three civilians killed in the rampage, one civilian critically injured. On Tuesday, Mamdani posting in memory of the slain NYPD officer Diderol Islam, drawing fierce backlash and accusations of hypocrisy. Since he really clearly wants to defund the police, he's said it many times, critics referencing those previous calls and resurfacing an old tweet in which he replied, quote, nature is healing, to a post about a police officer seen crying in his car. Mamdani, fresh off a plane from his native Uganda for his extravagant wedding, flanked by tons of security, addressing those comments.

[Kevin Hassett]

Do you wish you hadn't said some of those things a few years back?

[Zoran Mamdani]

My statements in 2020 were ones made amidst a frustration that many New Yorkers held at the murder of George Floyd and the inability to deliver on what Eric Adams, of all people described as the right for all of us to be able to enjoy safety and justice, that we need not choose between the two.

[Megyn Kelly]

That's not a disavowal. Mamdani also using the tragedy as an opportunity to call for more gun laws.

[Zoran Mamdani]

And as New Yorkers across the five boroughs and Americans across the country mourn this mass shooting, we are reminded that no matter how we're strong our gun laws are in this state, we are only as safe as the weakest laws in this nation. And so in this moment, the onus is on all of us to follow the words of Alain's brother and to put forward a vision of stronger gun laws. And I echo the call from Governor Hochul for a nationwide ban on assault rifles.

[Megyn Kelly]

Many quick to note that New York City already has some of the toughest gun laws in the nation, including an existing ban on rifles like the one used in this attack. To be clear, it appears Mamdani wants to both take away the cops and the guns. K the shooting Marking the first major test of Mamdani's campaign, as a new poll from Zenith Research shows the candidate with a commanding lead. This poll, which was completed before the shooting event on Monday, shows that of likely New York City voters, Mamdani is leading with 50% support. Disgraced former governor Andrew Cuomo, running as an independent, follows at 2022%. Republican candidate Curtis Lewa at 13 and incumbent mayor Eric Adams, also running as an independent, in the basement with just 7%. The poll conducted by a longtime political pollster who says he worked on Governor Cuomo's 2014 reelection campaign, surveying 1,000 likely voters cross tabs revealing Mamdani's intense popularity among younger voters, garnering 82% of those age 18 to 34, despite ongoing accusations of antisemitism. Mamdani also polling at 67% among Jewish voters aged 18 to 44. Good luck. Enjoy the election set for November 4th. How voters will weigh the fallout from this week's violence and Mamdani's response remains to be seen. And that'll do it for your AM Update. I'm Megyn Kelly. Join me back here for the Megyn Kelly Show. We'll be live with Glenn Greenwald Today, live on SiriusXM Triumph Channel 111 at noon east on YouTube.com megankelly and on all podcast platforms.