Inflation topped 4% in May as CPI surged to highest level in 3 years

On this "Face the Nation with Margaret Brennan" broadcast, moderated by Margaret Brennan:

Defense Secretary Pete Hegseth

Sen. Mark Warner , Democrat of Virginia

Sen. Mark Kelly , Democrat of Arizona

Gary Cohn , IBM vice chairman and former National Economic Council director

Click here to browse full transcripts from 2026 of "Face the Nation with Margaret Brennan."

MARGARET BRENNAN: I'm Margaret Brennan in Washington.

And this week on Face the Nation: the U.S. and Iran on the brink of a truce. We will get the latest in an exclusive interview with Secretary of Defense Pete Hegseth.

As the nation's capital prepares for a UFC fight night on President Trump's birthday, a deal that could potentially end a war in the Middle East is expected to be signed.

We will also hear from two key Democrats on committees with oversight on national security, Senators Mark Warner and Mark Kelly.

Despite a sharp jump in the inflation rate, now at its highest level in three years, President Trump is optimistic an end to fighting will stop the surge in energy prices.

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DONALD TRUMP (President of the United States): No, I love it. The numbers were great. You know what I really love? I love the inflation.

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MARGARET BRENNAN: We will get a reality check from one of President Trump's top economic advisers from his first term, Gary Cohn.

It's all just ahead on Face the Nation.

Good, morning, and welcome to Face the Nation.

We face a key decision point today that has implications for the global economy and potentially could stop nearly four months of conflict with Iran. As we come on the air, a preliminary memorandum of understanding between Washington and Tehran has yet to be signed.

But if and when the agreement takes effect, it would extend the cease-fire, reopen the Strait of Hormuz, and kick off 60 days of negotiations to resolve the other big issues. Yet, even as both sides signal a deal is within reach, hostilities in the region continue.

This morning, the Israeli Defense Force conducted strikes in Lebanon on Beirut's southern suburbs to target the Iranian-backed Hezbollah leadership. The IDF called it retaliation for strikes on Israel. CBS has learned the potential U.S.-Iran truce includes a vague reference to ending the fighting in Lebanon, which may not be enough for Iran's leaders.

And Iran's failure to cut off support for its proxy force Hezbollah may not be enough for America's partner Israel.

For the latest, we begin this morning with Secretary of Defense Pete Hegseth, who joins us from Tennessee.

Mr. Secretary, welcome to Face the Nation.

PETE HEGSETH (U.S. Defense Secretary): Good morning, Margaret. Thank you.

MARGARET BRENNAN: So, did the Hezbollah-Israel strikes disrupt any of the plans to have this memorandum signed today? Are we on track for a Sunday signing?

SECRETARY PETE HEGSETH: From all I know, we are on track. It's not a matter of if. It's a matter of when.

There's logistics involved into how these things happen. Ultimately, obviously, we're attuned to what's happening with Hezbollah firing rockets into Northern Israel, which they need to stop doing, and Iran needs to encourage them to stop doing that in very adamant ways, and Israel was very measured in its response, understanding that a deal is on – is – we're on the verge of a deal.

So, I don't expect that to disrupt. I also accept – expect more robust talks there. The negotiations business is not really mine, but I think those talks will continue. And if Iran wants this to hold, they need to – they need to pull back Hezbollah, no doubt.

MARGARET BRENNAN: So, this memorandum would be an extension of the cease- fire, as you said, with a promise to keep talking.

Given how clear President Trump has been that he wants to end combat, will the U.S. troops come back home? Will those two aircraft carriers be pulled back?

SECRETARY PETE HEGSETH: Well, what – Margaret, what I would say the president's been most clear about is that Iran will never have a nuclear weapon, never, full stop.

And this deal, as we talk about aspects of the deal, some of which have come up publicly, are totally wrong. It is – it's performance-based, no money released to Iran until they perform. There's no trust and verify. There's no trust here, and we're going to verify everything.

Nuclear material will be destroyed and removed. The nuclear program will be dismantled. The straits will be open, no tolling. This is – this is not a – the JCPOA was a path to a bomb. What this deal will be will be a wall to a bomb, and that was the objective from the beginning, very clear from the beginning.

So, as far as our military posture, we'll maintain what we need to. The blockade has been a devastating success for us and impact on the Iranians.

MARGARET BRENNAN: So…

SECRETARY PETE HEGSETH: So, think of – think of this chain of events militarily just for a second.

You had 45 days of overwhelming combat, which Iran could not manage, and their navy's gone, air force gone, air defens…