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U.S. Fed Keeps Rates Unchanged Near Zero; Justice in Times of Crises; Imagine a World. Aired 2-2:30p ET
Aired September 17, 2015 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTIANE AMANPOUR, CNN HOST: Good evening, everyone, and welcome to the program. I'm Christiane Amanpour and we are awaiting breaking news
tonight from the U.S. Federal Reserve, which any moment now will announce whether or not it will raise interest rates for the first time since 2006.
The federal funds rate is now nearly zero. It has an impact on everything from how much interest you get in your savings account to how
much is invested in business.
Now if it's raised, the Fed will be signaling increasing confidence in the U.S. economy.
We just heard that the Fed has chosen not to raise it, not to change it. The rate stays the same.
So experts have been pondering what all this is about, whether it be would raised, whether it wouldn't it be raised and what it all means to the
U.S. and to the global economy. We are going to bring in our expert, CNN's Richard Quest, to start breaking this down.
Richard, were you surprised that it remains unchanged?
RICHARD QUEST, CNN HOST: I'm not surprised. It was a 50-50. I had actually thought they probably would do it just to get it done.
But I've got the statement in front of me here. It says here the Fed -- well, the important thing here about what the Fed has decided is that
information received since July suggests that economic activity's expanding at a moderate pace. Household spending and business is increasing
moderately. The housing sector, the labor market continues to improve with solid job growth. On balance -- and this is a key point, Christiane -- on
balance, labor market indicators show underutilization has diminished, inflation has continued to run below the committee's long-term objectives.
So they're still looking very carefully at what they believe is the inflation issue. They are obviously worried about what's happened in terms
of markets. And that's why they've decided not to go this month.
But if you look at the plot of dots where they will go and when they will go, the preponderance of view is still this year, Christiane. So that
means we're now looking towards October and December.
AMANPOUR: So lay it out for us in terms of -- you just sort of talked about what the motivation might be. The IMF, the International Monetary
Fund, had urged the Fed not to raise the rates.
Do you think that had any effect whatsoever on Janet Yellen's decision?
QUEST: No, I don't. I think she probably paid respect and read it. The World Bank also joined in there and said don't raise rates.
I'm just reading, again, why they decided to do it. The committee realized and expected -- the committee anticipates that will it be
appropriate to raise the target rate when it's seen some further improvement in labor market and is reasonably confident inflation will move
back to 2 percent.
So that's the point here, Christiane. What they're looking for, they see things are going OK in terms of labor market reforms, in terms of job
creation. They see that's moving in the direction they want. But it's not there yet.
But what's worrying them as well is inflation. With the higher dollar, with the lower oil price, inflation is continuing to run
dramatically below their target range. And that's why they don't feel obliged or ready to do it now.
It's a knife edge decision, Christiane. Look at the market. The market had been down before the announcement. It's up some 25 to 30-odd
points. The market likes this but the market, Christiane, knows it's on borrowed time.
AMANPOUR: And there was so much talk amongst the experts today, awaiting this decision about the so-called liftoff, the term the Fed itself
was using. A lot of traders and things said that they hoped and expected that it would raise the rate somewhat, that it was kind of time to do so.
Joining us now, Richard, from New York is also Gillian Tett, she's the U.S. managing editor for the "Financial Times."
So, to you, Gillian, as we have this three-way conversation, is -- how much of a difference does it make if, as Richard has said, they intend to
change it, raise it this year? So that is not in that many months from now.
GILLIAN TETT, U.S. MANAGING EDITOR, "FINANCIAL TIMES": Well, certainly we're back to the cliffhanger that we've been in for the last few
weeks, playing out over the next few weeks, if not months.
I mean, anyone who's bored of talking about the Fed, prepare to get even more bored because, the reality is, they are very keen to act. They
want to normalize policy. They want to bring to an end what was supposedly a temporary crisis-fighting sort of moves.
And the problem is that they're caught in a terrible bind between a rock and a hard place.
TETT: As Richard says, the unemployment data is actually roughly where they want it to be and in many ways it should suggest that they
should be acting now. The inflation data is a great mystery because it's a lot lower than anyone expected.
And then you have the financial markets. And another thing is that right now Janet Yellen is like the pilot of a plane with a dashboard kind
of not working as you would expect because the data is not behaving as they would normally expect to see at this point in a recovery. And that leaves
them very, very uncertain of what to do. So they're playing for time.
AMANPOUR: So, to both of you, let's talk about how this affects everyday life, everyday people and not just that but sort of the macro
picture as well. Obviously, the U.S. economy is doing well. It's doing better than in Europe and better than what we've seen happen in China
China would have been pretty upset had there been a raise.
Am I right to assume that?
And would it have been a bit of a thorn in the side of President Xi Jinping and President Obama's upcoming meeting?
QUEST: I think that everybody knows this is coming. It's a question of when, not if. And now it looks like it's going to be a month or two
I don't think China would have been as concerned as the other emerging markets. Every emerging market from Brazil to Russia to India to
Indonesia, as you name them all, they're all being clobbered by a falling oil price. And the moment normalization starts, people, there will be a
flight to quality and you'll start to see investment capital leaving those countries and potentially heading to the United States.
So what have they done by buying a little more time?
They bought a bit of certainty. They've allowed themselves a bit of wiggle room. But I don't think that Janet Yellen is wasting too much time,
frankly, worrying about what everybody else outside the United States is thinking. I think she's got her focus very firmly on what needs to happen
in the U.S.
TETT: I mean --
AMANPOUR: -- yes, I mean, I was just going to say, what happens inside the U.S. happens and affects what happens outside the U.S.
Go ahead, Gillian.
TETT: No, I was going to say, another very important point, which is, as Richard says, when she does raise rates, money will flood into the U.S.
and that will strengthen the dollar even further.
Now that is potentially quite bad news for American companies that are wanting to export. It would actually be quite good news for China that
wants to have a weaker currency right now. But that would certainly threaten, add to the instability for emerging markets. And you don't have
to look very far from America right now to see the countries that are worried about that.
Brazil, for example, is very nervous of what a sudden move in U.S. interest rates would do.
And, of course, Janet Yellen has tried very hard to tell people that any move wouldn't be sudden. The Fed wants to plot a path of any rise
being very gradual. The problem is that they know the minute they actually move, there's a danger of a kind of whiplash effect in the markets, which
may be why they actually decided to stay the hands today.
QUEST: And if you look, Christiane, at that graph of the Fed funds rate, if you look at what it was like over the previous cycles and you've
seen some very sharp rises in the Fed funds rate, that's -- you take a look at 2008.
The last time this went up, it was a cycle that went from 2004 to 2006 and there were 17 quarter-point raises. Nobody in their right mind
believes that they're going to take rates over two years up to over 5 percent from the 0 percent to 1 percent at the moment, once they start
We're talking about a much more gradual, much more restrained, much more measured cycle than anything many of us have seen in recent memory.
AMANPOUR: So when they do, because they've said they will, by the end of the year, raise, by how much do you anticipate it will be raised?
And then what does that do to people who try to buy houses, people who are saving?
It obviously has different impacts on different people.
QUEST: Gillian, you get the first forecast.
TETT: OK, certainly. Well, I say I happen to have been talking to people in the mortgage world recently myself for personal reasons. And I
can tell that you certainly mortgage rates in the U.S. are still very low but not quite as low as they were six months ago.
So certainly the financial industry has been preparing. The reality is that the Fed desperately hopes to make any transition very gradual.
They keep talking about a very smooth path. They don't want to shock anybody. They hope they can go back to where they were before in a way
that almost nobody will notice.
In fact, the measurable they sometimes use is that they hope to treat monetary policy like a pilot landing a plane so stealthily that the
passengers have no nasty jolts. The problem is that right now there are a lot of storm clouds out there which could create nasty unexpected shocks.
China is just one of them.
TETT: And the biggest problem of all is that the Fed have never, ever done this before. Never before has it cut rates this low, pumped this much
money into the economy in an emergency way through quantitative easing and then try to take it out again.
The only honest answer is nobody knows what is going to happen. Maybe people will gradually adjust in a way that doesn't create any nasty bumps
along the way. But there is a potential that actually once the tightening process starts, the wider financial system will start to, if not panic,
then react in quite a severe way.
QUEST: I'm just looking at the dot plot, the famous dot plot, where they give their predictions. The majority believe that, by the end of this
year, you're looking at a rate of 0.5 percent to 0.75 percent.
By the time you get into middle of next year, you're looking at a rate -- forgive me looking ago way from the camera, Christiane, while I just
look at these numbers -- you're looking at about 1.5 percent to 2 percent. And even going out to 2018, nobody is forecasting, except one lunatic, that
rates go beyond 4 percent. Everybody's coalescing around between 3 percent, 3.5 percent.
AMANPOUR: -- I want you, Richard, to look at your screen and away from us and get those figures right. But I want to ask you about obviously
-- this is going to make savers smile, as has been coined, this phrase today.
But give us a little bit of the sense because everybody seems to revolve around, you know, health and wealth around the condition and the
state of the Chinese economy.
Just talk about it for the moment, since President Xi Jinping is coming for what is going to be potentially a pretty tense summit, given all
the cyber hacking and all the other things.
But what about the economy when he meets with President Obama?
TETT: Well, one of the first questions about the economy is what on Earth is going on in the economy?
Because the Chinese have been telling everyone that they are delivering a rate of growth of about 7 percent a year, which is terrific by
most people's standards. But there's a growing fear amongst economists that the figures are, if not fake, then very fudged, very massaged. And
actually the real rate of growth is 5 percent or even lower.
Now by American standards, that sounds like a lot. In fact, America will be grateful for 5 percent growth.
But the problem is that China has so many people it needs to find jobs for that, if growth is slowing down, there's going to be a big question
about how it finds work for people and also what would happen to all the big loans that banks have made to companies in the economy?
What's going to happen to all those factories they've built and buildings they've built, which are essentially lying idle? Because there
could be --
AMANPOUR: A lot of questions.
Sorry, I have to wrap you; you guys are going to be for a lot longer because Janet Yellen obviously is giving her press conference at half past
the hour. The network will be carrying it. And certainly, Richard, we'll see you back there at the half past.
Thanks both of you, Richard Quest and Gillian Tett.
Rates, as we've been saying, may remain unchanged by the money, but the money itself could see a transformation. A tip of the hat to an
overseas leader if a third Bush becomes the next U.S. president because during the Republican debate last night, Jeb Bush said that he would put
former British prime minister Margaret Thatcher on the $10.
That's over the likes of America's civil rights icon, Rosa Parks, and women's rights campaigner, Susan B. Anthony.
After a break, we turn a trailblazing woman from a different continent, Fatou Bensouda, the International Criminal Court's chief
prosecutor. She finds her hands are too often tied -- after this.
AMANPOUR: Welcome back to the program.
There were chaotic scenes in Croatia today. Thousands of refugees poured into the country, hoping to find a new route to Germany.
It's important to remember that what drove the floods of people here was a brutal war and the heinous crimes committed by ISIS and the Assad
regime. The world is horrified.
But will the perpetrators ever face justice?
I asked the chief prosecutor, Fatou Bensouda, of the International Criminal Court when she joined me earlier from the Hague.
AMANPOUR: Chief Prosecutor Bensouda, welcome to the program.
FATOU BENSOUDA, ICC CHIEF PROSECUTOR: Thank you. Thank you for having me.
AMANPOUR: First, what is shocking the world, and that is the grave crimes that are being committed against people in Syria by the Assad regime
and by ISIS, which is manifesting itself in this amazing flood of refugees to Europe.
Is the ICC able to launch investigations into possible war crimes, crimes against humanity, violations of international humanitarian law
against the parties in Syria, ISIS, for instance?
BENSOUDA: In the case of Syria, Syria is not a state party to the Rome statute. Therefore, the ICC primarily cannot exercise jurisdiction in
AMANPOUR: I understand you're saying that these countries, Iraq and Syria, where these particular crimes are being committed, are not
signatories to the ICC.
But your predecessor, Luis Moreno Ocampo, is actually urging you to take out a genocide case about what happened to the Yazidis.
BENSOUDA: We understand that for the crimes that are being committed in Syria by members of ISIS, there are nationals of states' parties that
are amongst the ranks of ISIS. And ISIS' jurisdiction covers crimes when committed on the territory of a state party or over nationals of states'
And in that regard, we potentially could have jurisdiction to try those nationals who are amongst the ranks of ISIS --
AMANPOUR: So you're opening a window, even possibly prosecuting them if, for instance, some ISIS person is identified as belonging to a state
that's signed up to the ICC?
BENSOUDA: Indeed. This is what we call the personal jurisdiction over nationals of states' parties. We could have that.
We do know that the nationals, such as from the Netherlands, from the U.K., from other states' parties, we do know that they are amongst the
AMANPOUR: Well, let me ask you about the Syrian nationals, because even though Syria is not a signatory to the ICC, there have been very well
confirmed allegations and evidence of Syria using chemical weapons amongst many other crimes against its own people.
Can you do anything about that?
BENSOUDA: As I said with respect to the Syrian nationals, we will not have jurisdiction because Syria is not a state party. And therefore we
cannot exercise jurisdiction either on their territory unless it is committed by the national of a state party.
AMANPOUR: As you look at what's happening to Syrians and to people in that region, from the Assad regime, from ISIS, how does it make you feel as
a human being, knowing that these unbelievable crimes are being committed?
These countries are not signatories. Their human misery, that's landed, you know, on Europe's doorstep, how do you feel about that as a
prosecutor and as a person?
BENSOUDA: It is heartbreaking, I have to say. Really, as a human being, as a person, and joining all others who care about human rights and
crimes being committed, it's really a very heartbreaking situation that we are all faced with.
But having said that, as a prosecutor, I can only investigate or I can only start an action if that state is a state party to the Rome statute and
I have territorial jurisdiction or maybe I have personal jurisdiction.
AMANPOUR: Let me move onto something that the head of UNESCO described to me not long ago, when ISIS was in full swing, destroying 2,500
years' old heritage in Palmyra and before that in Iraq.
She sort of likened it to ethnic cleansing. She called it cultural cleansing.
AMANPOUR: In your mind as a chief prosecutor, whether or not you have it on the books right now, is there a role for prosecuting crimes against
antiquity? In other words, you know, holding people who do that accountable?
BENSOUDA: Indeed, Christiane, even on the -- in the ICC statute, we do have the jurisdiction to be able to try the crimes of destruction of
property. It's within the ICC statute. And we have the jurisdiction and the mandate to do so.
In fact, if you will recall in my investigations in Mali, I had indicated that I was going to -- amongst the other crimes that I will look
at, I would also specifically focus on the destruction of the shrines that took place in Timbuktu some time ago.
AMANPOUR: Let's move on to one of your highest profile cases and presumably one of your most frustrating cases as chief prosecutor of the
ICC. And this is the case of Omar al-Bashir, the president of Sudan, who has been indicted, who should have been handed over to you.
And just this June, defying all sorts of travel bans, went to South Africa, which is a signatory to the ICC, and was basically allowed to get
on a plane and go back home without him being arrested.
What is your reaction to that?
BENSOUDA: I think that, in this particular case, South Africa should have respected its obligations under the treaty, the Rome statute, to
arrest and surrender President al-Bashir to the ICC.
You see, Christiane, the ICC was set up in a way that we operate without police. We operate without an army. The executing arm of the ICC
is the states' parties.
In the case of South Africa and President al-Bashir, this is what should have taken place. Unfortunately, it did not.
AMANPOUR: Well, let's talk about the U.N. because, as you know, the U.N. General Assembly is coming up; the annual meeting, apparently,
President al-Bashir would very much like to go as he has in the past. Before, the U.S. didn't grant him a visa.
But again, quoting your predecessor, basically suggesting that the United States should grant Mr. al-Bashir his visa and then, upon his
arrival, arrest and surrender him to the ICC.
Not a bad idea, right?
BENSOUDA: Not a bad idea.
And because this is a U.N. Security Council referral, the United States, even though they are not a state party to the Rome statute, have an
obligation under the U.N. Security Council resolution to also, in this case, arrest and transfer President al-Bashir. And I hope that they --
this will be done.
AMANPOUR: So how frustrated are you because there have been some 30 arrest warrants, only two convictions over the history of the ICC and it's,
as you've been describing, very difficult to bring some of the worst, most high-profile offenders, those who've been charged, to justice?
BENSOUDA: I mean, the challenges are there. And I believe that the challenges will continue to be there because, just by the nature of what we
are doing, investigating and prosecuting persons, who are, most times, at the highest echelons of their political structure or maybe in the militia.
But that doesn't mean that the ICC should close its doors and give up.
AMANPOUR: So you don't think the ICC's credibility is on the line?
BENSOUDA: I do not think so. Absolutely not. Far from it. I believe that the ICC is carrying out its work; it's investigating and
prosecuting, albeit under very difficult circumstances. But that is exactly what we were set up to do.
These crimes are very serious crimes. There are thousands and thousands of people all the time affected by these crimes. They must be
given justice. They're entitled to it. And we are the voice of those victims. We are the ones who are giving, bringing accountability for the
AMANPOUR: Prosecutor Fatou Bensouda, thank you so much for joining me from The Hague.
BENSOUDA: Thank you very much, Christiane. Thank you for having me.
AMANPOUR: And go online to hear Bensouda on those who say the ICC is anti-African.
After a break, imagine a world giving some of those refugees we've seen a sporting chance. We'll explain next.
AMANPOUR: And finally tonight, imagine a world full of good sports.
Last week this video of a Hungarian news woman kicking refugees went viral. But as this mean-spirited vision spread, it also led to an act of
humanity because one of the sprawling Syrian refugees was a professional soccer coach.
Spain's football coach training center swooped down to rescue him. Osama Abdul Mohsen was promptly given a job and a Madrid apartment. And
you can see the relief and the pure joy on his face and on his little boy's face as they arrived at Madrid's train station overnight.
As well as Spanish soccer, British tennis is pitching in. Wimbledon champion Andy Murray is promising to donate money to UNICEF every time he
hits an ace. So let's hope for the sake of the children that there are a lot of aces as the Davis Cup starts tomorrow.
And a British boxing champ, Amir Khan, is sending a convoy of aid to refugees who are crowding onto the Greek island of Lesbos.
There is nothing like good sportsmanship at time like these.
And that's it for our program tonight. Remember, you can always see all our interviews amanpour.com and follow me on Facebook and Twitter.
Thanks for watching and goodbye from London.