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Sri Lankan PM and President to Resign; Death of Shinzo Abe; January 6 Hearings to Focus on Far Right Groups; Ukraine Blows Up Russian Military Stockpile; Highland Park Tries to Heal after Parade Massacre; Abortion Rights Protests in D.C.; Many Economists Think Recession Is Looming. Aired 3-4a ET
Aired July 10, 2022 - 03:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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KIM BRUNHUBER, CNN ANCHOR AND CORRESPONDENT (voice-over): Welcome to all of you watching us here in the United States, Canada and all around the world. I'm Kim Brunhuber. Ahead on CNN NEWSROOM, turmoil in Sri Lanka.
Voting is underway in Japan just two days after Shinzo Abe was assassinated while on the campaign trail. We're live in Tokyo.
And the latest economic numbers participate a conflicting picture. We'll help you figure out what it all means.
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UNIDENTIFIED MALE (voice-over): Live from CNN Center, this is CNN NEWSROOM with Kim Brunhuber.
BRUNHUBER: The Sri Lankan president and prime minister say they'll resign after tens of thousands of people stormed their residences to protest the country's economic crisis.
This comes after months of protests across the South Asian nation. It reached unprecedented levels on Saturday. At one point more than 100,000 people converged outside the president's residence calling for his resignation.
The prime minister says he's willing to make way for an all-party government to take over. Sri Lanka's parliamentary speaker is calling for calm as the country waits for a transition of power to occur.
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MAHINDA YAPA ABEYWARDENA, SRI LANKAN PARLIAMENTARY SPEAKER (through translator): There is no need to destabilize the country any longer. I respectfully request the cooperation of everyone on behalf of the country and for the country's future in order to maintain peace.
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BRUNHUBER: CNN's Will Ripley joins us now from Taipei.
The protesters got what they wanted in a sense. The country's top two leaders are going.
So what now?
WILL RIPLEY, CNN CORRESPONDENT: Well, the calls for calm appeared to be answered, at least as things stand right now, Kim. It's still early hours here on Sunday. But in Sri Lanka, in Columbo, the capital, we're getting word that things are quiet.
Street crews are cleaning up after truly unprecedented violence, a months-long demonstration, building up public anger, continuing to grow because the calls for the president and prime minister to step down have gone largely unanswered.
The current prime minister, he actually was a replacement for the brother of the president. So there were two Rajapaksa brothers who would flip-flop between president and prime minister over the last number of years.
And what analysts say is that it was financial mismanagement, poor financial decisions by these brothers that are the reason why Sri Lanka is now facing this horrific financial crisis, the worst they've seen since World War II.
And the anger continues until, these protesters say, they'll be satisfied this new all-party government will start to fix these huge problems that the country is facing right now.
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RIPLEY (voice-over): Not enough fuel, food or medicine. But there is one thing in Sri Lanka that is not in short supply: anger. Crowds reached a boiling point Saturday in Colombo, after months of demonstrations and the country's worst economic and political crisis.
Throngs of protesters stormed the presidential residence, demanding president Gotabaya Rajapaksa resign.
FIONA SIRIMANA, PROTESTER: We demand the president and the prime minister to have a new regime for Sri Lanka. Also, I feel very, very sad that they didn't go earlier, because, had they gone earlier, they wouldn't have been any destruction.
RIPLEY (voice-over): Under pressure from the streets and by members of party leadership, the president informed Sri Lanka's speaker of parliament, he will step down on Wednesday. This speaker relayed that decision to the nation, asking protesters to return to their homes.
"There is no need to do to stabilize the country any longer," he says, adding that he respectfully requests the cooperation of everyone on behalf of the country and for the country's future in order to maintain peace.
A peace shattered by the biggest day of demonstrations yet that included the burning of the home of the country's prime minister.
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RIPLEY (voice-over): He, too, says he is willing to step down to make way for an all-party government.
Home to some 22 million people, Sri Lanka is witnessing its worst financial crisis in seven decades, a severe foreign exchange crunch, bringing the country to its knees.
There have been long winding queues for fuel, now limited to only essential services; power cuts, relentless. Analysts say the current crisis, a result of poor economic decisions over the years by Rajapaksa and his government.
Under the Sri Lankan constitution, if both president and prime minister resign, the speaker of parliament will serve as acting president for a maximum of 30 days, in which time, parliament will elect a new president from one of its members.
It would be a sweeping change for Sri Lanka, largely brought about by its own people, many who have nothing left to lose.
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RIPLEY: Financial mismanagement is believed to be one factor. But Sri Lanka has been hit by crisis after crisis over the last few years. You had the Easter bombings which really cut into the island's tourism industry, which is hugely important for their economy.
And just as they were bouncing back from the Easter bombings, you had the COVID-19 pandemic. And last year there was a plastic spill, a ship that caught fire. And all these plastic pellets washed up on Sri Lanka's beautiful beaches. And also that pollution in the ocean also affected the fishing industry.
So you can see how a number of factors have come together, Kim, that have led to a lot of frustration and real hardship for so many people. And they want change at the top.
BRUNHUBER: Yes, so many issues for whatever new government emerges. Will Ripley in Taipei, thanks so much.
Parliamentary elections are underway in Japan just two days after the former prime minister Shinzo Abe was brutally gunned down. He was killed while campaigning on Friday. U.S. secretary of state Antony Blinken will travel to Tokyo on Monday to pay his respects.
And we're getting details about the suspect's statements to police. Blake Essig joins me live from Tokyo.
Blake, let's start there with what we're learning about Abe's killer.
What more can you tell us?
BLAKE ESSIG, CNN CORRESPONDENT: As you mentioned, we're learning more about the man suspected of murdering former prime minister Shinzo Abe. It's worth noting that even though he admitted to the shooting, he hasn't yet been formally charged.
Now today he was moved from a police station in Nara, where he assassinated the former prime minister, to the district prosecutor's office. Kyoto News spoke with a former colleague of the suspect, who said he's a totally ordinary guy, seemed very mild-mannered, not exactly the characteristics of a man determined to assassinate the former prime minister.
But according to Japanese public broadcaster NHK, the 41-year-old suspect considered carrying out the crime a day earlier at a campaign event about 300 meters to the west of where he carried out the assassination.
He decided against it at the time because he was looking for a space that was less guarded. NHK also reporting that the suspect told police he'd originally planned on killing Abe using explosives before deciding to use a homemade gun.
In the end, Abe was shot twice from several meters away while delivering a speech in the city of Nara in support of LDP candidates. Those polls are now open across Japan.
While the former prime minister's assassination could affect turnout, it's unlikely to change the results. Abe's Liberal Democratic Party, the ruling party here in Japan, was already favored to win a majority of the 125 upper house seats being contested.
The winner will spend the next six years meeting inside Japan's parliament building right there behind me, Kim. And following the assassination, just to reiterate that Japan would not be deterred from the election, the current prime minister, Fumio Kishida, said democracy will never yield to violence and election activities would continue.
BRUNHUBER: Thanks so much. Blake Essig in Tokyo.
Shinzo Abe had a reputation as a skilled statesman, able to get along with most other world leaders, including former president Donald Trump, even earning him the nickname "the Trump whisperer" for seeming to know how to navigate Trump's unpredictable nature.
Earlier CNN spoke with John Roos who knew Abe well from his years as U.S. ambassador to Japan.
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JOHN ROOS, FORMER U.S. AMBASSADOR TO JAPAN: Let me put it to you this way: Prime Minister Abe recognized the incredible importance of the U.S.-Japan relationship.
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ROOS: The alliance that the two countries have is critical to peace and stability in the Asia Pacific region. And the prime minister recognized that. And he recognized that it was important to deal with any President of the United States.
So unlike some leaders in other countries, he did what he needed to do to maintain the relationship with Trump, a different personality, as you put it, and he was incredibly effective in that regard. And I think that had an immense, positive impact on the relationship between our two countries.
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BRUNHUBER: Roos also said, even though Abe's assassination has shaken Japan to the core, the country's strong and resilient and will get through it.
As a relatively close neighbor, Australia has had a long and cooperative relationship with Japan, going back decades. And Shinzo Abe's role was critical. The city of Melbourne lit up in the colors of the Japan flag Saturday night. Australia's new prime minister spoke about Abe's lasting impact on the region and the world. Here he is.
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ANTHONY ALBANESE, AUSTRALIAN PRIME MINISTER: Japan has lost a true patriot and a true leader. And Australia has lost a true friend.
Mr. Abe was a great statesman who made a difference. His vision of a free and open Indo-Pacific has had a profound effect on regional and global security. Even as the world shifted beneath our feet, Mr. Abe faced all of the challenges with a strength of character and an unbending resolve. He did not flinch. He did not weaken.
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BRUNHUBER: Nine British MPs are now vying to replace Boris Johnson as Conservative Party leader and become the next prime minister. Two former health secretaries launched bids Saturday, Jeremy Hunt and Sajid Javid, who quit the post just Tuesday amid a wave of government resignations.
Foreign secretary Liz Truss told a British newspaper that she'll run in the leadership race, the third cabinet member to enter the contest. And there's also newly appointed finance minister Nadhim Zahawi. He joined the cabinet less than a year ago.
One popular figure who says he won't seek the job, Defense Secretary Ben Wallace. He was widely expected to participate.
All right, turning to the U.S. and the investigation of the Capitol riots, a spokesman for the committee looking into the January 6th insurrection says it got, quote, "critical testimony" on Friday.
That's when a member of Trump's inner circle, White House counsel, Pat Cipollone, spent hours testifying under oath. CNN's Marshall Cohen looks at how important that testimony could be.
(BEGIN VIDEOTAPE) MARSHALL COHEN, CNN CORRESPONDENT: Donald Trump's White House counsel, Pat Cipollone, spent more than seven hours testifying to the January 6th select committee. Now that in its own right was a real breakthrough for the panel, because Cipollone had resisted doing a formal deposition for more than a year.
But he finally agreed to testify recently after a series of damaging revelations at previous public hearings. Now throughout his tenure as White House counsel, Cipollone often found himself pushing back against the more extreme members of Donald Trump's orbit.
And he was a first-hand witness to several of the make-or-break moments, where American democracy was on the line.
For instance, Cipollone was there when some of Trump's outside advisers raised the idea of declaring martial law. He was there when some of Trump's advisers encouraged him to use the military to seize voting machines.
And Cipollone was there when Trump nearly appointed a well-known conspiracy theorist to look for unhinged voter fraud theories. Perhaps most importantly, Cipollone was in the White House on January 6th.
And previous witnesses have testified about his desperate efforts to stop Trump from marching to the Capitol. He also warned others inside the White House they would have blood on their hands if Trump did not intervene during the violent insurrection.
Now Cipollone's deposition was videotaped. And the committee will get its first chance on Tuesday to publicly release some of the footage. Tuesday's hearing is expected to focus on the far right extremist groups that were a huge part of Trump's efforts to overturn the election: the Oath Keepers, the Proud Boys, the Three Percenters.
Many of their members stormed the Capitol on January 6th. Some have even been charged with sedition, an extremely serious crime. The hearing on Tuesday will delve into the connections between these militants and some of the key players in Donald Trump's orbit -- Marshall Cohen, CNN, Washington.
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BRUNHUBER: Ukraine's second largest city shaken by powerful missile strikes. Still ahead, we'll take you to Kharkiv to give you a first- hand look at the devastation.
And not all wounds are physical. We'll hear from survivors of the July 4th shooting in Illinois, as they try to heal from extreme trauma and grief.
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BRUNHUBER: Ukraine says rescue efforts are underway after a deadly Russian rocket attack in the east. At least six people are dead and five others injured after a rocket hit an apartment building in Donetsk. Three dozen are currently trapped in the collapsed building.
Meanwhile, six missiles hit the city of Mykolaiv Saturday. This video shows a huge crater, where one missile fell apparently, tearing a building to pieces. But Ukrainians are hitting back at a military target about 90 kilometers to the southeast.
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BRUNHUBER: Ukraine says it blew up Russian military stockpiles at an airport near the city of Kherson.
And further east, almost the entire Luhansk region is now in Russian hands. Ukraine is trying to find temporary homes for almost 300,000 people who have fled.
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BRUNHUBER (voice-over): While up in the northeast, Ukraine says that was the moment a Russian missile slammed into Kharkiv on Saturday, injuring at least four people.
Ukraine has pushed Russians away from (INAUDIBLE) Russian artillery attacks have increased.
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BRUNHUBER: A CNN crew was at the scene right after that strike in Kharkiv. Alex Marquardt saw the damage first-hand.
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ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT (voice- over): This is what it looks and feels like these days to live in Ukraine's second biggest city. It was a beautiful Saturday morning here in Kharkiv until 10:00 when the sound of a huge explosion just tore across this city.
And this is where that Russian strike happened. Just look at the size of this missile strike. It left a huge crater in one of the most central areas of the city. This is one of the most central strikes in recent weeks.
We are in the inside courtyard of a two-story residential building. The force of the blast taking down the two floors of that house right there. We're told by a neighbor that the family that lives there, thankfully, had left.
They now live in Germany. And the authorities are saying that no one was killed in the strike. There are, however, several wounded. One of them who was a woman who lived right over there, she was caught under the rubble. And she actually called her daughter from under that rubble before she was taken away by rescuers to the hospital.
We met her daughter when we got here to the scene. She was understandably very troubled. She was on the phone with her mother. She was picking up things for her mother to take to the hospital, her wheelchair, some clothes and her pet bird.
This is really just one example of what is the kinds of attacks that are falling all across Ukraine. We have seen a significant spike in the shelling in the southern city of Mykolaiv, where there's heavy fighting between the Russian and Ukrainian sides.
And then just south of us, in Donetsk, where we're expecting the Russians to make a major push in the future, there's been an uptick in the Russian attacks there. We're told by local authorities in Donetsk at least five people were killed today in those Russian strikes in the eastern province of Donetsk -- Alex Marquardt, CNN, Kharkiv.
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BRUNHUBER: Meanwhile the U.S. secretary of state says he isn't buying China's claims it's neutral in Russia's war in Ukraine. Antony Blinken left Indonesia on Saturday after meeting G20 foreign ministers after he spoke to his Chinese counterpart for more than five hours in Bali. Here is Blinken after those talks in Ukraine.
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ANTONY BLINKEN, U.S. SECRETARY OF STATE: What you hear from Beijing is that it claims to be neutral. I would start with the proposition that it is pretty hard to be neutral when it comes to this aggression.
There is a clear aggressor. There is a clear victim. There is a clear challenge, not only to the lives of (INAUDIBLE) people in Ukraine but there is a challenge to the international order that China and the United States, as current members of the Security Council, are suppose to uphold.
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BRUNHUBER: Officials in Highland Park, Illinois, are calling on their community to come together after a 4th of July mass shooting that killed seven people. CNN's Camila Bernal spoke to some of the residents.
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CAMILA BERNAL, CNN CORRESPONDENT (voice-over): As a way to heal, Steve Tilken visits this makeshift memorial, takes pictures and talks.
STEVE TILKEN, HIGHLAND PARK SHOOTING WITNESS: I just want to confront this demon of carnage, if you want to call it that. And for me to do it, I have to come here.
BERNAL: He has lived in Highland Park for 26 years and on July Fourth went to the parade with his wife and grandchildren.
TILKEN: We were 50 feet from the shooter and the easiest targets possible. And why we weren't shot I can't figure out.
BERNAL: He heard the shots and ran. Then saw the injuries and one of the dead. Here he is on surveillance video.
TILKEN: I just cannot wrap my head around what had just happened and I kept trying to figure it out and I guess I'm still trying to figure out what makes somebody this evil.
BERNAL: It's the question this entire community is trying to answer.
ALY PEDOWITZ, HIGHLAND PARK BUSINESS OWNER: For the first two days I would say, am I still sleeping?
Is this a nightmare?
Wake me up, because it cannot feel real.
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PEDOWITZ: And you go through these waves where you are numb for a little bit and then you get angry and then you feel guilty and then overwhelming sadness and then you go back to feeling numb and like, this isn't what happened.
BERNAL: Aly Pedowitz co-owned seven businesses in the middle of the crime scene. All her stores are closed.
PEDOWITZ: Before this all happened, our street was meant to be a place that provided a safe and fun-loving space for families, for kids.
BERNAL: Healing for her, she says, will come and she is allowed to reopen.
PEDOWITZ: We will be able to reclaim it is this place where we can be together and be happy and heal together and just support one another.
BERNAL: And little by little, in a business, in a neighborhood and in a makeshift memorial, members of this community showing their strength.
TILKEN: I will heal. I will absolutely heal.
BERNAL: And that's exactly what many of the residents of Highland Park were doing here at this rally, coming together to honor and remember the victims but also to demand action, specifically legislative action, because they say that is what comes next -- Camila Bernal, CNN, Highland Park, Illinois.
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BRUNHUBER: I'm Kim Brunhuber. For those in the U.S. and Canada, I'll be back with CNN NEWSROOM in a moment. For the rest of the world, "INSIDE AFRICA" is next.
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BRUNHUBER: Welcome back to all of you watching us here in the United States, Canada and around the world. I'm Kim Brunhuber. This is CNN NEWSROOM.
While the world might be done with COVID-19, it's certainly not done with us. On Wednesday, the World Health Organization said global COVID cases increased 32 percent over the past two weeks, driven by the BA.4 and BA.5 Omicron subvariants in the U.S. and Europe.
Johns Hopkins University warns of slowly rising infections in the U.S. It says about 108,000 new cases were reported each day over the past two weeks, up 6 percent from two weeks earlier.
The BA.5 subvariant has become the dominant form of COVID in the U.S. as case numbers head in the wrong direction. CNN's Jacqueline Howard breaks it down for us.
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JACQUELINE HOWARD, CNN HEALTH CORRESPONDENT: As the coronavirus spreads, we can expect to see more variants and subvariants like BA.5 emerge. According to the latest CDC data, BA.5 is causing more than half, 53.6 percent, of infections in the United States.
And other Omicron subvariants circulating right now, BA.2.12.1, causing 27.2 percent of infections, BA.4 causing 16.5 percent, and BA.2 causing 2.8 percent. And these subvariants are circulating at a time when nearly a third of the U.S. population lives in a county with COVID-19 community levels that the CDC considers to be high.
Those counties with a high level are spread across many major U.S. regions, like New York City, Houston's Harris County, Miami-Dade County and Las Vegas' Clark County. So even though our lives are returning to normal, this is just a reminder that the virus is still out there.
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BRUNHUBER: CNN health reporter Jacqueline Howard.
Abortion rights supporters rallied in Washington this weekend, calling on leaders to do everything they can to protect access to the procedure. House Democrats will introduce two bills this week and the president signed an executive order Friday.
He also said abortion rights advocates must do one thing overwhelmingly in November: vote. Jeremy Diamond is traveling with the president.
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JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: One day after President Biden signed an executive order, seeking to protect women's access to reproductive health care, protests from abortion rights activists continuing, including in front of the White House.
Now the president, he wasn't there. He's here in Rehoboth Beach, Delaware, for the weekend. But it's very clear, that growing call from abortion rights activists for the president to do more not abating, despite the new executive order.
That's largely because the new executive order the president signed Friday at the White House does direct the Secretary of Health and Human Services to take steps to protect access to medication abortion (sic), to try to protect patient privacy and security.
It also establishes a new interagency task force that will include the Health and Human Services secretary as well as the attorney general. But many of these steps are fairly vague.
And they also include actions that the president and HHS secretary have already underlined. And that's why you're seeing still a lot of frustration among abortion rights activists, who would like the president to take more decisive action.
The White House's head of the Gender Policy Council, Jen Klein, she made very clear on Friday that they understand those frustrations. But their power has limits.
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JEN KLEIN, DIRECTOR, WHITE HOUSE GENDER POLICY COUNCIL: I know it feels frustrating because we're taking action and then asking for more action. You can't solve by executive action what the Supreme Court has done.
The Supreme Court has taken away a constitutional right that was precedent for nearly 50 years and I think we all need to be mindful -- he is very mindful, we are all mindful -- that that can't be solved by executive action alone.
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DIAMOND: And that is ultimately the president's message as well, one we heard from him Friday, where he made clear, look, he's taking steps via executive action amid this pressure from abortion rights activists and, of course, his party's base.
But at the end of the day, he believes it's up to voters to get out in November and elect more pro-choice Democrats to Congress, who are willing to carve out the filibuster and then try and codify the rights that were previously enshrined in Roe v. Wade to ensure women do have access to abortion across the country -- Jeremy Diamond, CNN, traveling with the president in Rehoboth Beach, Delaware. (END VIDEOTAPE)
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BRUNHUBER: And Brian Todd was in Washington and has more on the demonstrations.
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BRIAN TODD, CNN CORRESPONDENT: A series of rainstorms did not stop hundreds of people from gathering in Washington to protest the decision by the Supreme Court, to overturn Roe v. Wade. Several hundred people gathered here in Franklin Square Park in downtown Washington, then marched over to the White House en masse.
They were briefed by protest leaders when they got to the White House, that if they wanted to risk arrest, they could press against the White House fence. And some of them did. Some even tied themselves to the White House fence briefly but then untied themselves and moved on.
We did not witness any arrests. The protests were very largely peaceful. There were police in and among the crowd. But no disturbances and no arrests that we saw.
The concerns that the peace protesters voiced to us mostly were, one, that the overturning of Roe will not be the end of efforts by the Supreme Court to go after reproductive rights. They're really concerned that if the right case comes up before the court that the conservative justices will use that case as a means to try to curb other reproductive rights, like plan B pills and IUDs. That is a big concern.
Another is safety. We had a couple of abortion rights protesters here, telling us that the overturning of Roe v. Wade does not mean that abortions will end in this country. They believe that it is just going to make them more unsafe.
That is a concern. They are also concerned about the safety of women seeking abortions in other states, if they're trying to go to a state that allows them, and also privacy issues, protecting the privacy of women who travel to different states.
And also abortion providers who provide abortions in those states that still allow it. So these are the things that are on their minds. And now, it's a matter of weighing strategy.
Even with the Biden administration's executive order signed on Friday, trying to provide more access to emergency contraception, things like that, there is enough vagary there that these people are really worried about how some of that is going to be implemented -- Brian Todd, CNN, Washington.
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BRUNHUBER: There are mixed signals on the U.S. economy. Just ahead, after a stellar U.S. jobs report on Friday, we'll find out why economists fear a recession might be on the horizon. Stay with us.
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BRUNHUBER: The latest U.S. economic numbers paint a contradictory picture. The Labor Department announced Friday that the U.S. economy added 372,000 jobs in June. That's more than analysts expected.
The current unemployment rate is at 3.6 percent and closer to the 52- year low it hit before the pandemic. The strongest job gains came from the professional and business services, leisure and hospitality and the health care industry as well as child care.
But tempering that robust news, inflation is at 40-year high, creating higher prices for everything from gas to groceries. And the president says he understands people are feeling the pinch. Here he is.
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JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: I know times are tough, prices are too high, families are facing the cost of the living crunch. But today's economic news confirms the fact that my economic plan is moving this country in a better direction.
We still have a lot of work to do. I am not suggesting there's not a lot more work to do. But I am suggest we're making significant progress.
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BRUNHUBER: So even with the red hot jobs numbers, many economists predict a period of economic unease, amid growing fears that a recession is looming.
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MARTY WALSH, U.S. SECRETARY OF LABOR: We're living in a very different, difficult time, very challenging time. I don't think it's very difficult to predict what a recession will look like if we are in a recession. I know we're seeing wage growth. Obviously it's not keeping up with inflation. But if we bring inflation down, the wage growth is good.
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BRUNHUBER: And Americans could soon get some relief pumping gas after U.S. benchmark crude oil prices took a tumble. Despite climbing back above $100 a barrel, they still were down for a week. Analysts believe the national average price for regular gas could fall 25 to 50 cents in the coming weeks. But analysts also say this could be due to fears of a recession
bringing demand down. Meanwhile, U.S. President Joe Biden says he hasn't decided whether he'll lift Trump-era tariffs on China. The tariffs applied a 25 percent duty on billions of dollars of some Chinese goods.
They were intended to reduce the U.S. trade deficit and force China into adopting fair practices. But China's behavior hasn't changed and the Biden administration says Beijing hasn't upheld agreements on purchasing U.S. agricultural products included in a Trump-era trade deal.
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BRUNHUBER: And for more on the state of the economy, joining us now is Ryan Patel, a senior fellow with the Drucker School of Management at Claremont Graduate University.
Thanks so much for being with us. It seems as if the numbers are just all over the place. Some of them suggesting we're sliding into recession. Others seem to show the economy has recovered, even booming, like the fact that the GDP is down but jobs are up.
I mean, what's happening here?
RYAN PATEL, GLOBAL BUSINESS EXECUTIVE: It's a multiple indicator. Everyone looks at the labor market. And I'm not saying it's a bad thing but it typically is a lagging indicator. But it shows the labor market is resilient.
As for the GDP, it's two quarters that is lagging. The common definition technically is a recession. So that is one. Really an indicator we need to be watching on top of all this is the Consumer Price Index.
Our consumer spending as much and so part of the job market is great, obviously finance and technology and investments, well, investment sectors have been up. It's very interesting to see how the consumer pricing is going to be going forward.
BRUNHUBER: Yes, absolutely. So you know, with all of this confusion, we're hearing conflicting things as well from the experts. We just heard a clip from President Biden, the White House is boasting about how strong the economy is.
But the former IMF chief economist said it's almost impossible for the Fed to get inflation down without pushing the economy into a recession.
So which story do you believe here?
PATEL: Let me be clear: I believe this next Fed meeting will be a 0.75 percent rate hike. So it is going to show -- I will be shocked if they're not going to be aggressive. So Kim, when they're showing this aggression, what does that mean? That means the economy needs it. They're trying to put pressure to try to slow it down. The Fed governor Christopher Waller said this quote, which I think stands out to me.
"Do big rate hikes when the economy is strong and the labor market can take it."
This is their small window that the Fed has to be this aggressive and try to get ahead of what is maybe deemed potentially over the few months for the job market is going to slow down and consumer spending is going to slow down.
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PATEL: We're definitely seeing inflation has hit the lower income households especially Bank of America's credit card and debit card data shows spending among that sector fell over 1 percent year over year. And we all know the economy draws over two thirds of growth from the consumers.
BRUNHUBER: What's it going to take to feel confident we're actually heading in the right direction here?
PATEL: That there's no more mixed signals. Let's be clear, before the pandemic, it was clear what sectors were growing, why it wasn't growing. Right now, we are seeing job losses. We're seeing investments and confidence, investments not going in the private market.
We see the stock market going up and down because of the lack of confidence. And part of what needs to be moving forward, Kim, what makes all of us is the strong indicator from the data spending, the strong indicator of how the economy is going to look like globally with some stability.
And we're not having that still, because we are seeing oil prices go up and down. We're seeing still, at the grocery level, that prices are inflated. The supply chain is still a mess. The consumers are paying for it.
So to me, if we're still paying for this increasing in pricing, it's not back to normal. And I think we need to see that more. And truthfully, Kim, it's going to be a little bumpy because we're not going to see that flip of a switch.
BRUNHUBER: The global outlook here, the head of the IMF said she couldn't rule out a possible global recession next year.
So even if Biden and the Fed pull all the right levers here, how much are we held hostage by other factors like, you know, the Chinese economic slowdown and Russia's war?
PATEL: Kim, I'm so glad you asked me that, because you can only control who you can control. But we've seen anything, even before the pandemic, trade wars, conflicts, Turkiye crisis, euro inflation, deflation from the crisis in Italy. All those make an impact. So all it takes, unfortunately, how fragile
the system is right now, is another conflict or, you know, the economy in China is a good example, where we, the whole global economy, the number two economy in the world, needs to be back, firing on all cylinders so companies and businesses can get back to catching up on those growth percentages.
You can't make up a double digit growth by doing single digits in general. So to me, I think you're right. I think we're all watching. This is going to be -- I hate to use the #InItTogether, that we all have to be able to grow together at that clip.
Otherwise it's going to be a slow process. And I think that's what most people are expecting. But, Kim, you and are hoping, we'll all be able to come together and make that supply chain crisis, trade war crisis, consumer spending and inflation and spending controlling war back together, because everyone is getting back.
BRUNHUBER: A few reasons for optimism maybe but, as you say, a bumpy ride ahead. Ryan Patel, thank you so much for joining us. Really appreciate it.
PATEL: Thank you, Kim.
(END VIDEOTAPE)
BRUNHUBER: Historic firsts at Wimbledon as the women's singles winner makes history at the tennis courts. And the men gear up for today's final. We'll have details after the break. Stay with us.
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BRUNHUBER: Well, 30 million people across the U.S. are under some sort of heat alert. Several states are expected to see triple digit temperatures throughout the weekend.
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BRUNHUBER: I'm Kim Brunhuber and more CNN NEWSROOM. Please stay with us.
