. breaking now on "andrea mitchell reports" -- chris christie on the spot. who will he choose to replace the late frank lautenberg? and when the governor schedule a special election? chris christie is set to hold a news conference at 1:30 p.m. eastern. we'll be there. chain of command, the military's top brass called on the carpet by the women of the senate. over replacing commanders to prosecute sexual assaults. >> our goal should be to hold commanders more accountable, not render them less able to help us correct the crisis. >> making commanders less responsible and less accountable will not work. it will undermine the readiness of the force. >> the unit will rise or fall as a direct result of the leadership of its commanding officers. commanding officers never delegate responsibility. they should never be forced to

delegate their authority. >> the military justice system is a critical tool for doing this. >> i have a daughter who is looking at coming into the united states air force. i will not be tolerant of this crime. >> not every single commander can distinguish between a slap on the ass and a rape. >> they are committing crimes of domination and violence. this isn't about sex. this is about assaultive domination and violence. >> senator mccaskill will be joining us direct from that hearing in a few moments. striking back -- conservative groups get their say about the irs targeting scandal. >> i'm not here as a serf or a vassal i'm not beg my lords for mercy, i'm a born free american woman, wife, mother and citizen. and i'm telling my government, that you forgotten your place. >> laying down the gauntlet. president obama all but dares republicans to filibuster his appeals court nominees.

>> this is not about principled opposition. this is about political obstruction. >> and joe biden learns who has the real clout in his family. >> my youngest granddaughter says pop, she said, bradley cooper is in this hotel. and i said, you're kidding me. i said, that's nice. she said pop, you're his friend, right. i said, well, yeah, we're kind of friends. she said well pop, you ought to call him. i said, what do you want me to do? she said, we have a really big suite. she said you should have him done like you do other people, like you have presidents and things come and see you. i said honey, i've got to go meet the president of brazil. she said pop, just pop. i said honey. i've got to go to the meeting. well, bradley, somehow we're going to have to make up for this. you owe me. good day, i'm andrea

mitchell in washington. the military fix is not enough. so say the senators. the commanders promise change, as long as the commanders are still in charge of prosecuting sexual assaults. what we've got here is a failure to communicate. joining me for our daily fix, chris cillizza, msnbc contributor and managing editor of postpolitics.com and nbc capitol hill correspondent, kelly o'donnell. the hill is not getting across to commanders that they want change and they want it now. >> there's been a boiling over that's been coming for some time, andrea, it's been really led by some of the women in the senate who have been hearing from constituents, families of those in the military. the victims themselves. and have felt they have not been able to get enough attention. one of the things that we have lawmakers trying to do here is to take some of the handling of these cases out of the chain of command. and that's something that we hear from the brass, that they do not want to see happen. because chain of command is such a core issue in how the military

deals with so many issues. and while they acknowledge that there's a real crisis, a cancer is how they described it, of sexual assaults in the military against women and men, senators want more action and believe that there have been enough red flags for far too long, without sufficient steps being taken to prevent this. and so there's a real sense of anger today, focused anger and a sense that perhaps the pentagon is not yet getting it. andrea. >> and john mccain was one of those speaking out at that armed services hearing. so it isn't only the women. but certainly the women have been leading this fight. here's senator mccain. >> just last night a woman came to me and said her daughter wanted to join the military and could i give my unqualified support for her doing so. i could not. i cannot overstate my disgust and disappointment over the continued reports of sexual misconduct in our military,

we've been talking about the issue for years and talk is insufficient. >> and chris cillizza, this is not the only hearing on the hill today. which feeds this general sense that government isn't working. the anger over all of this. the other of course is the irs hearing. this was one of the exchange, which involved paul ryan. >> what happened to you was unfair. it was unfair. and incredibly. inconvenient. but it was a mistake. our job is to make sure it never happens again. anything else like the circus that's happening in the oversight committee or here, is simply political theater. >> mr. ryan is recognized. >> i'm going to deviate from my original question in response to what i just heard. >> mr. chairman. mr. chairman -- >> welcome to washington.

>> so here we've got the hearing that is supposedly looking into all of this. and they're bickering amongst themselves. chris cillizza? >> well -- you know, andrea, this is why people think washington does not work and does not listen. first of all, let me say on the sexual assault in the military, i'm so glad you flagged the mccain comments, this is john mccain, one of the biggest defenders of the military in the senate in this country. saying he could not tell in good conscience, a woman whose daughter is thinking about going into the military, to do so that's startling. on the targeting by the irs, what you see here is democrats, jim mcdermott featured there, trying to say look, no one condones this targeting. no one thinks this is the right place for the irs. but this was a mistake by a relatively small group of people. this was not a grand scheme to suppress conservative activity

in the 2012 election and beyond. the question is, is that right or wrong. we certainly are going to have our fill of it by the end of the week. we'll have had six hearings between the senate and the house on the irs. my guess is we'll have more. now the question is, does more come out that suggests that affirms congressman mcdermott's point of view or refute it is. >> the inspector general report that came out details the egregious overspending on stupid stuff. and we're talking about the happiness expert. >> just take a look at some of the things we're putting it up on the screen now, kelly. the innovation expert. $17,000 for leadership through art? i mean it sounds like kindergarten, except at taxpayer expense. >> this goes back to a conference that was held in 2010 in anaheim. and 2600 irs employees were sent there. so there were big bills to get them all there.

hotels and so forth. that's going to happen with any conference. but when you point out those key speakers who were invited, a happiness expert, we all need more happiness and apparently you can earn $11,000 to tell people how to get it. so today the treasury inspector general put out a thorough report especially on that conference. but really look being at more than 200 conferences that the irs has held. and found a series of things that they had done that could have been done better to save the taxpayer money. not that there isn't a proper use for meetings and not there of course aren't expenses that go along with it but looking for the excess. and they found lots of examples of it. andrea? >> and just briefly, chris christie at 1:30, chris cillizza, i know you're all over this. do you we expect he's going to announce a schedule for a special election? >> we do. >> one option to let things go until 2014. that would be a little transparent and open him to criticism. that he'll eventually nominate a republican, if he doesn't today? >> here's what we're hearing,

andrea. and i say hearing, because i always caution, this is the decision of one person. we've known this all the way, this is what chris christie thinks is the right thing to do and who he thinks the right person is to pick. what we're hearing is the election is likely, the special election is likely to come in 2013 and he is likely, i say likely, important to emphasize, not certain, he is likely to pick someone who will serve out the remainder of frank lautenberg's time. but likely not run for a full term, frank lautenberg up for a full term before he passed away in 2014. that's what we think will happen. but i caution people, this is one man makes this call. that man is chris christie. when he says we expect he will give us some indication, andrea at 1:30 of what he will do. so we don't have to wait that long to know. i'm impatient, but i think i can make it. >> and we also just got word, the official word about the funeral services for frank lautenberg. we should say that they will be, the casket will travel by amtrak to new york and the funeral

services will be tomorrow at park avenue synagogue with vice president biden, senator menendez, former secretary of state, hillary clinton, and the lautenberg family. all delivering eulogies. and kelly, obviously this is going to be a moment, the senate will not be in session, clearly tomorrow. >> and there will be an opportunity for senators to pay their respects in person. i've been told that the body of senator lautenberg will lie in repose in the senate chamber on, that lincoln catalphalque, that's an important ceremony, one we rarely sees with the senate floor will be the place to offer respects and that will happen sometime on thursday. >> thanks so much, chris cillizza and kelly o'donnell. we've had make action, three separate actions against iran, sanctions from david cohen, the treasury department announcing

these and the undersecretary for terrorism and financial intelligence joins me now. direct from a hearing with the banking committee to explain all of this. this is the toughest actions you've ever taken against iran. let's go through what we've done this stems back of course to their nuclear, suspected nuclear activity. and you've taken actions against their currency. the rial. that means they cannot spend that money. that currency cannot be used outside of iran. the markets and financial institutions around the world, the exchange in dubai and the uae. that really hurts their economy. >> right, we have taken a number of steps in the last several days as you know. the action on the rial was something that was in an executive order that the president issued yesterday afternoon it goes into effect on july 1 z. it makes it a sanctionable offense for any financial institution, exchange house, to transfer rials into another

currency or to hold them in accounts outside of iran. it's designed to make the rial unusable in international commerce. >> already it had lost 40% of its value because of previous treasury actions. why now? there's an election two weeks from now in iran this goes into effect july 1st. this is sending a very big signal. do you think we can influence iranian behavior? so far sanctions have not changed iran's commitment, only today the ayatollah said that they should make no concessions. the candidates in the election, only one candidate who matters, the nuclear negotiator, jalili. >> it's timing driven by ongoing effort to try to persuade the iranians to come to the negotiating table with the seriousness of purpose and to offer meaningful concessions on their nuclear program and to meet their international obligations. there was a series of meetings earlier this year in kazakhstan,

where the iranians continued to defy the will of the international community. we've been proceeding on this dual-track policy. offering the iranians the opportunity to negotiate. and in the meantime, intensifying the sanctiones if they don't. they have not taken the opportunity to negotiate. so we are proceeding with the intensification of the sanctions. >> you also took action against their auto industry, which the u.s. claims is a cover, a thin disguise for efforts to import equipment that's used for uranium enrichment. dual use. but then this crazy chart. i'm sorry we didn't have it in time to put it up. there's this crazy chart of all the interconnections with the ayatollah khamenei's office, his own personal office and you've taken sanctions against these companies that are basically raising money, profiting, the ayatollah and his office. >> that chart is network of 37

separate companies that are all part of something called the execution of the iman khamenei's order. it's an organization that's overseen by the supreme leader's office in iran. it generate billions of dollars of revenue every year for the iranian leadership. it runs investments for the iranian leadership. including the supreme leader. we took action today to identify that whole network. that labryinth, that crazy quilt of companies you held up as being part of the government of iran. and what that means is that any financial institution around the world can't do business with those companies. without risking sanctions. their assets are frozen and anybody who deals with them risks sanction. >> but iran seems to be prospering. it's the people are being hurt, but the government has not yielded at all. they're getting tougher and according to the state department last week, they're the prime source of terror around the world. they're helping assad stay in power.

so is it back-firing? >> i don't think so. and i think the, the indications are that the government in iran is feeling the force of these sanctions in almadi. one of the things they were seeking in negotiations was relief from the financial sanctions, relief from the oil sanctions that have taken more than a million barrels of oil per day of iranian oil off the market. the leadership in iran is feeling the heat from these sanctions and we tend to continue to bring that, that intensified sanctions to the leadership so long as it's necessary to try to encourage them to come to the table. >> secretary cohen, thank you very much. thanks for taking time today. and hillary for 2016? maybe not. but the former secretary of state talked about a possible future project while paying tribute to her good friend and fashion icon, oscar de la renta. she prended him with the founders award in new york city

last night. >> you know, i have been thinking, however, now that i have some more time on my hands, i am going to be pitching andy and others, on a new show for bravo. to sort of fill that gap that is so apparent to some of us. and all you really need is a small, but passionate audience to be successful. we could call it "project pantsuit"? rought overmany discounts to thine customers! [old english accent] safe driver, multi-car, paid in full -- a most fulsome bounty indeed, lord jamie. thou cometh and we thy saveth! what are you doing? we doth offer so many discounts, we have some to spare. oh, you have any of those homeowners discounts? here we go. thank you. he took my shield, my lady. these are troubling times in the kingdom. more discounts than we knoweth what to do with.

now that's progressive. join us at projectluna.com

. we should not be taking into account how good a military person is in deciding whether or not to try them on a felony.

the facts of the felony, the facts of the felony are facts of a felony. i don't care how good a pilot it is, or a special ops person it is. their ability to perform as a soldier or an airman or a member of the coast guard is irrelevant as to whether or not they committed a crime. >> ha was a tongue-lashing from missouri senator claire mccaskill to the top brass for arguing that commanders can fix the problems of assault rather than turning it over to outside prosecutors. senator mccaskill is joining me now. a big thanks for coming out to talk to us. i know the hearing is still going on now. are they getting it? because all i heard from the piece of the hearing that i tried to monitor before coming on to air was, they kept saying that the campaign of command could work. you're not persuaded? >> i think that some of it can work and some of it should not work. we have to remove the commanders from any ability to overturn

jury verdicts and we need to remove from any consideration anything other than the facts of the case. in terms of the case moving forward. i think an open question is, in which environment is the victim most protected. one where a commander has signed off on going to trial? or one where only outside lawyers have signed off going to trial. and here, the goal is that the victim feel protected and supported. because that's the only way we're going to get these cowards in prison where they belong. >> what about the fact that you have to go back into, into the situation where your commander might even be the perpetrator? and might have gotten off? and you have to salute that person. we've heard testimony about that. >> that's one of the things we have to change, obviously, i think it's one of the many pieces of legislation than put forward. the victim needs to control where they are after they have come forward. including a requirement that the

perpetrator be moved. not that the victim be moved. but the perpetrator be moved. there's no reason to disrupt the victim's career. the person who is accused of this need to be moved immediately. i don't care who it is. and so that's one of the pieces of the reform that is embraced by many of the different legislative proposals that have been put forward. >> another issue that has come up is the way sexual assaults are reported. the whole issue between rape and unwanted sexual advances. can you speak to that? >> yeah. one of the points i tried to make today is the military has really mucked this up in terms of mushing together unwanted sexual comments or what we think of, hostile work environment, sexual harassment. and the brutal, violent crime of sexual assault. they are not the same thing. it is not a continuum. there are a lot of nice guys, quote-unquote, who are very polite, who commit rape and

there are a lot of people who made bad jokes and dirty jokes and say wrong things that would never be violent. and they've actually not separated those out in their statistics, so the number that's being thrown around of 36,000 sexual assaults, that's not 36,000 sexual assaults. it's 36,000 unwanted sexual contact. they've got to delineate those numbers so we can track their performance on getting at these criminals and getting them in prison. >> you had this array of military top commanders in front of you today. did you hear back anything that tells you that they are taking it in, and that change is going to happen, absent the legislation that you all have been proposing? >> well i think, andrea, as you well know, the military is not really comfortable, they're not warm and fuzzy about dramatic changes, especially in the uniformed code of military justice. the fact that they have all signed off and removing the ability of a general to overturn

a jury conviction is remarkable. that is a form that is going to happen. it's going to happen this year. and there have a number of other reforms that they are embracing. there are a few areas where we all don't agree. but frankly, in some of those instances, i think what we've got do do is look at this through the prism of prosecution, how do we support the victims coming forward. how do we make sure they're not retaliated against? how do they remain comfortable in their work environment after they've come forward if we can solve those problems, then we're really going to turn the corner on this issue. >> claire mccaskill, thank you so much again, senator. >> thank you. and a special homecoming for a woman of incredible courage. boston marathon bombing victim, erica brannick. the last to leave the hospital. she lost her leg above the left knee in the april 15th attack. some of her friends and preschoolers welcomed her home on monday. >> it's good to be with the

people who know me the best. and to finally be home with them. it's a little overwhelming, too.

there's been widespread outrage from news organizations about the obama administration's aggressive policy of targeting journalists as part of their leak investigations, veteran "washington post" intelligence and community reporter and columnist walter pink "us," has argued that journalists also bear responsibility. >> first of all, the a.p., there were a number of phones that were involved, the house gallery phone of the a.p., the lack of warning and journalist organizations, many that i'm familiar with and i'm part of saying why wasn't the a.p. notified so they could negotiate the terms of a subpoena and we have aong track record, all of our organizations do, of working

with the administration to define what can be reported and when. but you have made the case that the a.p., we'll talk about korea in a moment and fox news, that that was a really damaging case. and that the administration was on better footing than many have argued. well the leak took place in the midst of complex but very important interinvestigation, c.i.a. had actually placed somebody inside al qaeda in the arabian peninsula. >> in yemen. >> in yemen. >> incredibly hard to do. >> not only incredibly hard to do, but convinced that group that they had a person who wanted to do a bombing and they actually gave them their newest bomb. the bomb was turned over to the americans, went to the fbi's lab down in quantico.

and at that point, the fact that we had the bomb was leaked. the idea originally was to send this person back, tell them the bomb hadn't worked. because what we were looking to get was the man making the bomb. >> so this was midway through a super-secret covert operation, where we had persuaded, i believe it was a saudi, someone to go into yemen. >> recruited by the british. >> a saudi, british, american covert op. it came after the saudi interior minister had been targeted for assassination, attempted say sass nation, injured badly by al qaeda. so the saudis had a big interest in this and all of a sudden it's leaked and the a.p. had prepared to go with it the way we've written the story or most people had written the story is that the a.p. withheld it until this person was no longer in danger. but what you're saying is that it prematurely ended the covert

operation. because the idea was to send this person back in. and say, i need another bomb, that didn't work or something such as that. and then that would lead us to the bomb-maker. >> it's not only that. the a.p. story was to some degree, wrong. because if you read the a.p. story, they said the c.i.a. had broken up an al qaeda plot. there was no al qaeda plot. it was a c.i.a. operation. there never was a chance that there be a bombing of an american aircraft. and writing the story the way they did was only part of the story. they also turned it to say, raise the question of was the white house misleading the public. because the week before, there had been statements out of both the white house and homeland security, that they knew of no plot by al qaeda coming up. >> and you're saying technically that's true, because the plot

was ours all along. >> it was ours and it forced the disclosure by the way, of really what had gone on. >> now the counterargument is in a the white house leaks when it wants to. that they cooperated with movie-makers after the osama bin laden raid that they were very free and backgrounding other national security former officials whom they wanted to go out and spin the good news. so can we have it both ways? the white house saying we're going to go after people for these leaks, which arguably they should. going after the intelligence official who is are leaking these stories, or this information. but at the same time, the white house leaks when it wants to. >> that's been the history for the 40 or 50 years i've been writing this stuff. we have to be perceptive about how we're being used, when we're being used. and we also have to understand that we're dealing with highly classified information. and that we shouldn't rush to

publish. >> of course there's a lot of counterargument also about the james rosen and fox news, and why it was suggested that he was a co-conspirator. wasn't that criminalizing reporting? this is i have to go back on my law degree. this is what happens in criminal investigations. all the time. they have to justify the search warrant and what they were seeking was a search warrant. this is an affidavit. a 28-page affidavit by an fbi agent to justify to a judge, the idea that you want a serve warrant. the fact of the matter is, like it or not, we are all co-conspirators. when we try 0 get people to give us classified information. that's just the fact. it doesn't mean that we'll be prosecuted. this is just a step in an

investigation. >> walter pincus, thanks very much. queen elizabeth today celebrated the 60th anniversary of her coronation at westminster abbey where she was first crowned as a 27-year-old, the service featured the priceless st. edward's crown. which has adorned heads of british monarchs for 350 years. three generations were on hand, including prince william and a very pregnant katherine who is expected to deliver sometime next month. luckily though, ya know, i conceal this bad boy underneath my blanket just so i can get on e-trade. check my investment portfolio, research stocks... wait, why are you taking... oh, i see...solitary. just a man and his thoughts. and a smartphone... with an e-trade app. ♪ nobody knows... [ male announcer ] e-trade. investing unleashed.

s the u.s. has been slapping iran with new sanctions for its suspected nuclear weapons program. the ayatollah khamenei is taking a hard line against all new sanctions. nbc's ali aruzi reports that

jalili's fiercely anti-american style is gaining him support. >> a few have started in a lackluster beginning. but this rally at a small stadium packed to the rafters in central tehran for saed jalili seems the most serious so far. songs against america blared from speakers while crowds chanted, death to america, israel and england. if dr. jalili does become the country's next president, this rally will be an early indication of the direction the country will be heading over the course of the next four years. >> he joins me from tehran. you were there at the rally. jalili is the choice, he's got the blessing, if you will from the leadership from the supreme leader because he's the clear front-runner now? >> that's right, andrea, he seems to be a favorite. he's within the inner circle and he's got all the correct

conservative credentials. he's staunchly anti-american. he's close to the supreme leader and he was a veteran of the iran-iraq war where he lost his right leg. all of these campaign rallies and videos so far have taken the line of resistance, of building up the nuclear program and they've also lamb basbasted. and one of the nuclear negotiators he's lambasting is a candidate in this election. though they've been critical about over the issue. it will be a clear direction of the course the country is going to go. if he does indeed become president. andrea? >> as we reported earlier, there are new sanctions again today, against the personal office of the supreme leader. this, what is the impact in iran other than hurting the iranian people, the iranian economy.

but it does not seem to be affecting policy. >> no, it doesn't seem to be affecting policy at all. in fact they seem to be digging in even deeper. the supreme leader made his speem today, the anniversary of the founder of the islamic revolution. ayatollah khamenei and not to make concessions over the nuclear issue because it would only favor the west and harming iran. they're digging in very deep. they don't want to seem to want to budge on this issue. they feel if they give up their nuclear program, they've got nothing else to negotiate with. so it's going to be a tough fight with these guys over this nuclear issue. >> ali arouzi live from tehran. and jury selection begins today in boston for alleged mob boss, whitey bolger, he's accused of

murdering 19 people over two decades. the trial is expected to last several months and involve testimony from a number of infamous mob figures. bolger, an alleged fbi informant was arrested last year after spending 16 years on the lam. if convicted he could spend the rest of his life in prison. while he was on the lam, his brother was a top-ranking official, elected official in massachusetts politics. in the senate. we'll be right back.

and we have breaking news, governor chris christie is now about to speak, about the schedule we believe for the special election and what he's going to do to replace frank lautenberg. >> while we're satisfied with the passage and will look to the rest of the week to remember his life and his service, i know is that senator lautenberg wouldn't want the people of new jersey to go without a voice in the united states senate. to today we're going to begin the process of sending a new representative to the u.s.

senate. let me be clear. this is the how i see my responsibility to the people of this state. this is about guaranteeing the people of new jersey both a choice and a voice. in the process, and the representation that they deserve in washington. whoever is going to be our next united states senator, should be nominated by primary of the people, and voted on . >> by new jersey law, i'm calling for a special election to be held this year. first, the issues facing the united states senate are too critically important and the decisions that need to be dealt with too vital not to have an elected representative making those decisions who are voted on, who would vote on and decided on by the people of the state. these decisions should be made by elected officials who represents the will of the

voters of new jersey. new jersey legislature does allow me to make an appointment for senator -- [ inaudible ] [ inaudible ] [ inaudible ] [ inaudible ] [ inaudible ] >> yes, new jersey statute does allow me to name an appointment to serve for the remainder of senator lautenberg's term. with a primary and general election taking place in 2014. but i firmly believe that the decisions that need to be made in washington are too great to be determined by an appointee for a period of 18 months. we must allow our citizens to have their say over who will represent them in the senate for the majority of the next year and a half. people of new jersey deserve to have that voice. secondly, we have to move swiftly to fill this seat and insure that there is both a primary and general election as soon as possible. as dictated by new jersey law, i have today issued a writ that

will specifically designate the cause and purpose of this special election and the dates the primary and general elections will be held. the process to fill this u.s. senate seat must allow the people to have a choice to determine their nominees. this is simply not negotiable to me. i will not permit the insiders and a few party elites to determine who the nominee of the republican party and the democratic party will be. a primary election is necessary. the people must choose. as such, pursuant to the provisions of new jersey state law, the primary election for the united states senate will be held on tuesday, august 13th, 2013, which is 70 days after the issuance of this writ today. and then 64 days thereafter, the general special election will be held on wednesday october 16th.

the statute provides for the governor of new jersey to make this decision, if the governor deems it advisable to have a special election. i deem it advisable. to have a special election. in fact i deem it necessary. the dates are what the statute requires. and at the same time, there is enough time to guarantee a fair process and voter engagement throughout. the special election must honor the electoral process and the will and rights of the people to have a choice, a voice and timely elections. and while there will be a cost associated with the special election process, the state will be responsible for all the costs of this election. we are calling the special election, we will be responsible for all of the associated costs. as such, the secretary of state's office will oversee this process and the mechanisms required to insure that it runs smoothly and i have complete

confidence in their ability to do so. in the end, the costs associated with having a special primary and general election in my mind cannot be measured against the value of having an elected representative in the united states senate with so many consequential issues are being debated and determined this year. the citizens of new jersey need to have an elected representative to the united states senate and have it as soon as possible. i've yet to make a determination as to who i will appoint to hold this seat between now and the results of the october 16th special election. but when i determine who that person is, i will make that announcement promptly. questions? >> so you've heard chris christie is going to hold a special election, he's announced he's using his authority as governor to schedule primaries

in august and then the special election in october. and he says he's not yet decided whom he will appoint to the hold the seat until the october 16th special election. and says that the state will assume all of those costs. some in his own party may have preferred that he choose to cho appoint someone to hold the seat until 2014 so that it would not be contested, but he's chosen not to do that, and of course, that probably would have been contested in courts. now we'll close it out with the economy which would be one of the big issues in new jersey and elsewhere across the country and we have with us no better than jill wan tet from "the financial times." home prices have been going up and wall street has been buying up housing in depressed markets, but there is a key move on interest rates, as well. >> yes. a lot of people are watching the house price index recently which is understandable.

in the last few days something interesting has occurred. we have data showing that the cost of refinancing mortgages has really started to jump quite sharply in response to the bond market turmoil and the that the fed would taper off its quantitative easing and it is buying $60 billion worth of mortgage-backed securities and that's keeping financing costs low for homeowners. now at beginning of may, refinancing with 30 mortgages was basically rung the costs there at 3.4% by the end of may it was 1.4%. it reached a 4% level and that really means what the fed's doing is it's starting to impact the lives of ordinary homeowners. so the big question now is will house prices keep rising or is this going to be a sign that what the fed is doing is starting to actually slow down the nascent economic recovery. >> is this a sign that the fed is sort of testing whether or not the economy is strong enough to handle this inching up? it's more than an inching up?

>> everyone knows that at some point this extraordinary quantitative easing will come to an end. >> we've got to figure out a way to back out of this. >> there's a big fight going on outside the fed about how they act or don't act. in a sense is dipping their toe in the water by talking about it a bit, talking about tapering it and taper is the new buzz word and trying to see how the markets react, but the fact that the mortgage market has reacted so fast will be welcome news to people in the fed. remember, a key reason why the fed introduced these extraordinary measures was to try to get american homeowners more confident and ready to go out and buy again. >> they might be taking away the punch bowl and the bottom line is if you'll refi, don't wait. >> if rate goes up again, you better refi now so maybe we'll see more activity now because people bring forward their plans for later in the year, but you could actually have consumers saying, just when i was starting

to feel more confident, just when the unemployment rate was coming down, we have yet a new round of uncertainet and big question from all of this is if we see this much reaction from the fed just trying to talk about trying to taper off its aid in the markets, what on earth will it happen when it starts? >> jillian tett, thanks, as always. >> turkey, violent protests there have spread to 67 of turk turkey's 81 provinces after a sit-in to protect a park in istanbul, but it sparked from there. it callses for the prime minister's resignation has become the focal point of the unrest. joining us now who better than nbc's chief foreign correspondent richard engel. richard, this is not really about a park. what is going on here? >> it was about a park for about ten minutes and then the riot police came in and they were quite aggressive with the protesters, and there was a lot of imagery of riot police

spraying pepper spray into what looked like young people, students, people who were well dressed and not armed in any way, spraying it right into their faces and it grew and grew, and is now a protest movement against -- and you're showing right now the famous -- it's called the woman in the red dress, and it is one that is spreading all over the internet in turkey. this woman just holding her bag and being sprayed with pepper spray. now it is a protest movement against the prime minister himself. the protesters say he's too authoritarian. he's been in power for about ten years. he doesn't consult generally with people. he makes his decisions and he's interested in big, grand projects. he wants to build bridges and he wants to build monuments to the state and is less concerned about the education system, is less concerned about the people. this is what the critics say, and they also say that he has an islamic agenda that is slowly

inching and creeping into a country that has been a secular democracy for the last 90 years or so. some of these things are small. they're petty restrictions on alcohol sales that were recently just passed. restrictions on smoking. where you can smoke and when you can smoke. restrictions on even the kind of uniforms that stewardesses can wear on turkish airline flights. all of these little things have started to add up into a lot of frustration, and people say he's -- police have now been using too much force. he has an islamic agenda and he's acting like an authoritarian leader. we'll see where this goes from here, but in this environment clearly after a few years of the arab spring, it clearly wasn't a good idea for the turkish authorities to go in with that much force and break up a small demonstration on camera and spray these demonstrators with pepper spray. >> richard engel, and of course,

it is such an important american ally for whatever happens next door in syria. more on that to come. thanks for being with us. that does it for a busy edition of "andrea mitchell reports and follow us on twitter. tamron hall has next on "news nation." we continue to follow the breaking news reaction to governor chris christie's announcement that he will hold a special election to fill the late senator lautenberg's seat. news that is not likely to be pleasing to his own party. of course, the republicans. plus, hundreds of protesters arrested in what's become a weekly event in north carolina. why the demonstrations are growing and thousands are gathering in raleigh for what's being called moral mondays. we have a live report on that. plus conservative groups targeted by the irs give emotional testimony on capitol hill. some calling for subpoenas, even arrests, and the fight is on. president obama with the direct challenge to republicans on capitol hill to confirm his nominees for federal appeals

court judges. we've got it all covered coming up in three.

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