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Soon, Fed Expected To Announce Another Big Rate Hike; Over 1 Million Puerto Ricans Without Power As Recovery Faces Brutal Heat; NASA's 1st Salvadorian-American Headed To The ISS. Aired 1:30-2p ET
Aired September 21, 2022 - 13:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANA CABRERA, CNN HOST: Robin Wright and Colonel Cedric Leighton, I really appreciate you both so much. Thanks so much for offering your insights.
CNN has just learned two American veterans, who have held by Russian forces for months after being captured fighting on behalf of Ukraine, have been released as part of a prisoner swap between Russia and Ukraine.
Both of these men were captured while fighting for Ukraine north of Kharkiv back in June. Their families say they are thrilled and they didn't know this prisoner exchange was even in the works.
Just moments from now, the Fed will unleash another massive rate hike in its intensifying fight against inflation. So what does that mean for you and your money? That's next.
CABRERA Get ready. Another big interest rate hike is on the way.
Just moments from now, the Federal Reserve is expected to raise interest rates by three-quarters of a percentage point, possibly even more, which will mark the third time this year the Fed has taken such aggressive action to try to tackle inflation.
CNN's Rahel Solomon is with us now.
OK, so walk us through what we're expecting and the impact on peoples' lives.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Ana, as you laid out, we are expecting another massive rate hike of three-quarters of a percent. That would be the third consecutive in a row. That's something we haven't seen in modern history.
I just want to take a look back very quickly at what the Fed has been up to this year. So we started at about zero percent. They upped the rates in January. They have been increasing ever since. Three-quarters of a percent the last two meetings. What's interesting to note here is that we expect right at 2.5 percent for the Fed's benchmark interest rate. We expect this to hit 4 percent by the end of this year.
What does that mean for people at home? It bears repeating, right, because it means, if you are looking for a home, your monthly payment will be much higher than it was even earlier this year because mortgage rates have doubled since this year.
If you have a credit card balance making the minimum payment, it's going to take you longer to pay that back because you are paying more in interest.
So it's something to think about. The impact on mortgages, by the way, according to new data today, is part of the reason home sales are down a whopping 20 percent compared to a year ago.
It's something to think about because, as we know, the Fed is not done with raising rates so it's something to think about in terms of your financial situation.
But also your job. The unemployment rate is at 3.7 percent. Many people expect,. as a result of what the Fed is doing, that's going to increase. So at home, just be mindful of that and prepare for that.
This is something that will be with us, the aftermath of what the Fed is doing for years to come.
CABRERA OK, Rahel, thank you so much for that update. We'll be watching this big announcement coming up around 2:00.
Let's bring in Justin Wolfers. He is a professor of economics and public policy at the University of Michigan.
Professor, it's always great to have you with us.
Right now, Americans are already dealing with the highest credit card rate since 1996. We know mortgage rates have topped 6 percent. Car loans are the highest they have been since 2012.
So what do you expect will happen today? Do you think the Fed goes for a full point rate hike like some have predicted?
JUSTIN WOLFERS, PROFESSOR OF ECONOMICS AND PUBLIC POLICY, UNIVERSITY OF MICHIGAN: I think the most likely thing is that the Fed will raise the short-term interest rate by three-quarters of a percentage point. That's a bit because, a few weeks ago, economists were arguing would it be half or three-quarters.
Inflation turned out a little worse than we thought so most people thought they would be a little more aggressive. There are a few people who expect the Fed to raise the interest rate by 1 percent. But I just don't think that's particularly likely.
I think the most important thing for viewers is to put this in context. Even if it raises the interest rate by three-quarters of a percent, the Fed's interest rate will be 3.25 percent, which, in the long run of history, just isn't that high.
If I called my parents and complained to them about 3.25 percent interest rates, they would remind me back when they were 15 percent or more.
So rates aren't as low as they once were, but this is not a new world at all.
CABRERA I guess it's a are you a glass-half-full or glass-half-empty person in terms of looking at this situation.
It does feel painful for a lot of Americans, right, especially as we're paying more for everything, which is why we're seeing interest rates going up, trying to tamp those high prices down.
But you go to the grocery store right now and this was the latest report that we got when it comes to food prices -- eggs up 40 percent. Margarine, 38 percent. Flour up 23 percent. This is from a year ago.
So if the Fed is raising interest rates to try to cool inflation, when am I going to go shopping and see these prices actually go down?
WOLFERS: Ana, I actually think you're exactly right. We should sometimes tell the story as if the glass is half full.
Let's not just pick a few items that have seen large price rises. Realize we could pick a bunch that have particular small prices or
even prices falls, like cell phones, for instance.
Try a bit of focus on the average. And the average is still worrying. And it says that inflation is rising at about 8 percent.
But when we look forward, it's not necessarily prices are going to fall but if they stop rising, that will pull inflation back. And we still have a lot of post-pandemic supply chain issues working out.
I bet next year will be a better time to buy a car and lots of other things. It will still be miserable at the grocery store for a while, though.
CABRERA: OK, Justin Wolfer, thank you so much for checking in with us.
CABRERA: Thank you so much.
This is not what Puerto Rico needed right now. While most of the island struggles with no power or running water, a brutal heat wave is now making matters even worse. We'll take you there live, next.
[13:45:35] CABRERA Right now, brutal conditions in Puerto Rico as millions of people face Hurricane Fiona's aftermath. Piles of debris littering the streets.
The majority of the island is now enduring day three without running water or power. Plus it's hot. Heat indexes between 105 and 109 degrees.
CNN's Leyla Santiago joins us live in Puerto Rico.
Leyla, if you can hear me, I know there's a lack of food, water, shelter. Now we have this heat. How are people getting through this?
LEYLA SANTIAGO, CNN CORRESPONDENT: Well, we are actually in an area that was completely under water just a few days ago. A lot of these neighbors are coming home for the first time since being in the shelters.
So you can see the cleanup has begun. You see the refrigerator was pulled out here. They have mattresses. All of this being pulled out onto the sidewalk waiting for pickup.
This one caught my attention. This is the dollhouse they bought their granddaughter to replace one damaged in Hurricane Maria. And now, here it is. This one is on the sidewalk waiting to be picked up after Hurricane Fiona just destroyed their home.
You know, it's interesting to me that they are just coming back from the shelter and somehow consider themselves the lucky ones, because this is in the northern part of the island so power and water was restored this morning.
And even still, they have lost it all. They say they feel somewhat lucky to have that power and water and yet still feel forgotten.
Listen to my conversation with Ana, who lives right over here.
(BEGIN VIDEO CLIP)
ANA REYES SOSTRE, HURRICANE VICTIM: (SPEAKING FOREIGN LANGUAGE)
SANTIAGO: She says she's getting so emotional because she sacrificed so much to make this her home and then she gets something like this and it's emotional for her.
(END VIDEO CLIP)
SANTIAGO: So again, folks here still emotional, still very much upset as they're having to once again pull damaged goods from their home. But, you know, again, lucky to feel that they have power and water.
The governor yesterday said that a good chunk of this island would have power restored by the end of day today. People here grateful for that.
But the exception was the southern part of the island that was also hammered by Hurricane Fiona.
So a lot of folks waiting to see what happens by end of day today, with the power and the water situation, given that about half the island still doesn't have water -- Ana?
CABRERA Leyla Santiago, thank you for staying on top of that.
We'll be right back.
CABRERA A dramatic deadly crash caught on camera.
And I have to warn you these next images are disturbing.
Dash camera is capturing the moment that a semi-truck is driving over an overpass. Look at that. You can see it is landing below and bursting into flames.
And it happened just outside of Dallas. Police believe that tractor- trailer collided with another vehicle before toppling over the bridge. The driver of the truck did not survive.
In the future, cars may have the technology to stop people from drinking and driving. The National Transportation Safety Board is recommending that new vehicles require systems that detect alcohol impairment, which would stop or limit the car from operating.
If the National Highway Traffic Safety Administration adopts this recommendation, it could go into effect in the next few years.
Now, from not drink and driving to driving around drinks. The drink? Beer. And lots of it spilled all over the Florida highway after a crash involving semis. You can see all of the boxes of brews just littering I-75 and making a mess of the morning commute, as you'd imagine.
While relations are at an all-time low, one partnership of the U.S. and Russia hit a high today. We just learned, moments ago, the Russian Soyuz spacecraft docked at the International Space Station carrying two cosmonauts.
An astronaut who is making history with this mission. This is Dr. Frank Rubio, the nation's first Salvadorian-American to go to space.
CNN space and defense correspondent, Kristin Fisher, joins us now.
Tell us about Rubio.
KRISTIN FISHER, CNN SPACE & DEFENSE CORRESPONDENT: Ana, this is Dr. Frank Rubio's very first space flight and it's on a Russian Soyuz spacecraft.
His crewmates are all Russian cosmonauts. And he's spent the last several months learning Russian and training and living in Star City, which is right out of Moscow.
And the reason that Dr. Rubio was flying on a Russian spacecraft is it's part of NASA's crews swap program. And NASA astronauts have been flying on Russia's Soyuz rockets for many years now. But never with tensions quite this high.
And a few months ago, I had a chance to interview Dr. Rubio. And I asked him had he had a chance to talk with his Russian crewmates about the situation in Ukraine, the war in Ukraine, the tensions between the two countries.
And he said, yes, he would arrest it very shortly, to be honest. He said, more than anything, we need to try to avoid anything that takes away from our camaraderie. They're just really focused on getting this mission accomplished safely.
And they have now arrived safely at the International Space Station -- Ana?
CABRERA: All right, glad to end the show on a high note there.
Kristin Fisher, thank you for bringing us that.
And that does for us today. Really appreciate you for joining us.
The news continues right after this with Alisyn and Victor.