Jamal Khashoggi's disappearance strains US-Saudi ties

This is a rush transcript from "Special Report with Bret Baier," October 16, 2018. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM, R-S.C.: This guy is a wrecking ball. The MBS figure is to me toxic. He can never be a world leader on the world stage. This guy has got to go. Saudi Arabia, if you're listening, there are a lot of good people you can choose, but MBS has tainted your country and tainted himself.

(END VIDEO CLIP)

BRET BAIER, ANCHOR: Senator Lindsey Graham talking about the crown prince, Mohammed bin Salman, saying he has to go as a result of all of this. In the meantime, the president sitting down with the Associated Press in the Oval Office just a short time ago. That interview just wrapping up. We are just getting this picture, and a quote about all of this. And This is about the Saudi situation, and here is the president, quote, "Here we go again with you're guilty until proven innocent. I don't like that. We just went through that with just a Kavanaugh, and he was innocent all the way as far as I'm concerned, so we have to find out what happened."

Let's start there with the Saudi situation. Let's bring in our panel: Matthew Continetti, editor in chief of the Washington Free Beacon; Mara Liasson, national political correspondent for National Public Radio, and Mollie Hemingway, senior editor at The Federalist. Mollie?

MOLLIE HEMINGWAY, THE FEDERALIST: It is true that you need facts before you decide on what your course of action should be, and we do not have good, reliable information. We know this man is missing, we don't know much else. And it's very important for people to get the facts.

As for Lindsey Graham, if he has information that MBS is somehow involved, Mohammed bin Salman is involved, or that there are better people that Mohammed bin Salman who should be helming the kingdom, he should share that information. I think that bin Salman being portrayed as a reformer has been overdone. He is something of a reformer compared to the other people there, but there aren't great candidates necessarily. And I think people need to think about where they want things to go after they find out the information.

BAIER: Historically, lawmakers calling for some element of regime change usually doesn't work out too well.

Mara, the Turks on background are telling all kinds of reporters all kinds of things.

MARA LIASSON, NATIONAL PUBLIC RADIO: Horrific, horrific things.

BAIER: On the ground. The problem is that Secretary of State Pompeo sits with the king, the crown prince, and says they are having a full investigation, and they denied any knowledge of what's happening inside the consulate.

LIASSON: And the president repeated that again. He tweeted that he got strong denials again from the crown prince, although he also said that if it turns out the ruling family knew about this, it would be, quote, very bad. So he seems to be pretty deferential to the Saudis denial so far. But don't forget, Pompeo went to Saudi Arabia first, then he's going to Turkey. That's who's doing the investigation, although Saudi Arabia says it's cooperating. But it's the Turkish forensic investigators who were in the consulate yesterday.

BAIER: Right, saying that they had, or telling people on the ground that they have evidence, but we haven't seen it. Matthew?

MATTHEW CONTINETTI, THE WASHINGTON FREE BEACON: The kingdom has been key to the American force structure in the Middle East for decades. Mollie is right that you need facts before you reach any judgment. And then once you reach a judgment about what's happening, you need to use prudence to determine your course of action.

I think a lot of people in Washington are moving very quickly to condemn in the most righteous terms and really take the most aggressive action towards the kingdom without thinking of the possible consequences of such action in this most important of regions. Remember, we are also staring down the Iranian theocracy, which doesn't have a very good human rights record on its own.

LIASSON: But we are not friends with them.

BAIER: And neither does Turkey, frankly. So all of that factors in.

I want to turn the discussion to the economy. The president speaking with our own Trish Regan on FOX Business about the Fed again.

(BEGIN VIDEO CLIP)

PRESIDENT DONALD TRUMP: My biggest threat is the Fed, because the Fed is raising rates too fast. And it's independent, so I don't speak to him, but I'm not happy with what he's doing because it's going too fast, because you looked at the last inflation numbers, they're very low.

TRISH REGAN, FOX BUSINESS NETWORK: But you put them there. You think about Janet Yellen, and she was so dovish.

TRUMP: Can I be honest. I'm not blaming anybody. I put him there. And maybe it's right, maybe it's wrong.

REGAN: What if he gets it wrong?

TRUMP: I put a couple of other people there that I'm not so happy with, too. But for the most part, I'm very happy with people.

(END VIDEO CLIP)

BAIER: He's been in a lot of interviews lately. Here's a look at the Dow since the president's election. And obviously we've seen the up and down in the past week and a half with the big day today, but there you see it. And then you look at the economic changes since the president took office. GDP growth, unemployment rate, consumer confidence up significantly, and earnings up as well. Mara?

LIASSON: Yes. It's a really great economy. And that's all the more surprising that the Republicans are really struggling in the midterm elections. I can't think of a time when a party has had a better economic story to tell, and they're having trouble telling it.

HEMINGWAY: In fact, I think the economic optimism is probably a big reason why Republicans are not struggling, as you might expect them to be doing in a midyear election. Two years into a presidency, you usually see really large losses, but there is so much optimism with the economy going so well I think it is staving --

LIASSON: So you're saying they would be even worse off. I think we don't know.

BAIER: Quickly?

CONTINETTI: The president is the issue in the midterms. The Fed could become the issue in 2020. If the Fed takes that punch bowl away too soon, President Trump is right to be worried about the economic consequences.

BAIER: It is interesting to hear the president talk about this as he does. He's obviously not the traditional president.

CONTINETTI: Talks about a lot of things earlier presidents haven't talked about.

BAIER: Haven't talked about, that's right.

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