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Vladimir Putin Draft 300,000 Russians with Mobilization Plan; New York Attorney General Lawsuit Alleges Donald Trump, Three of His Children, and Trump Organization Fraudulently Inflated Assets; At Least Eight People Killed in Days of Public Unrest in Iran. Aired 12- 1a ET

Aired September 22, 2022 - 00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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JOHN VAUSE, CNN ANCHOR: All around the world, you're watching CNN NEWSROOM.

In the hour ahead, Vladimir Putin's mobilization of 300,000 reservists and nuclear threats widely seen as a sign he's losing the war, is he really bluffing?

After the steal, New York State files a $250 million civil lawsuit against Donald Trump and three of his children alleging years of bank, tax and insurance fraud.

And in Iran, women are joining protests nationwide, heads uncovered and cutting their hair. The growing outrage at the hard line morality police.

ANNOUNCER: Live from CNN Center, this is CNN NEWSROOM with John Vause.

VAUSE: Vladimir Putin's national address and his announcement of the first call up of Russian troops since World War II has been both ridiculed and condemned around the world. Many believing it's a sign recent defeats in Ukraine have left the Russian president weakened.

Even in Russia, anti-war protests were held in two dozen cities and independent monitoring group reports more than a thousand people have been detained at some police stations in Moscow. Some of those detainees are being drafted, sent directly to the military as part of Putin's mobilization plan.

And Putin is backing referendum scheduled for this weekend in four Ukrainian regions which are under Russian control. What is seen as a pretext for Moscow to declare war in what would be claimed as Russian territory.

Ukrainian President Volodymyr Zelenskyy delivered a video address to the U.N. General Assembly on Wednesday, he demanded Russia be stripped of its security council veto power and punished for what it's done to Ukraine. (BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT: A crime has been committed against Ukraine, and we demand just punishment. The crime was committed against our state borders. The crime was committed against the lives of our people. And Ukraine demands punishment for trying to steal our territory. Punishment for the murders of thousands of people.

(END VIDEO CLIP)

VAUSE: The U.S. President Joe Biden called Russia's invasion of Ukraine a shameless violation of the U.N. Charter, while he had been critical of Putin for making irresponsible nuclear threats.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: This war is about extinguishing Ukraine's right to exist as a state, plain and simple. And Ukraine's right to exist as a people.

Whoever you are, wherever you live, whatever you believe, that should not -- that should make your blood run cold.

(END VIDEO CLIP)

VAUSE: Along with the call of over 300,000 troops, double the number of Russian forces already in Ukraine. Vladimir Putin has also threatened to use all means necessary, including nuclear weapons to defend Russian territory.

CNN's Nick Paton Walsh has our report.

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NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): His biggest statement, since he began the war that he still won't call a war, delayed 12 hours and perhaps less drastic than feared, but still a huge move by Vladimir Putin, who until now use this sort of volunteer recruitment process, declaring the first forced mobilization in Russia, even if it is partial since World War II.

VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): I repeat, we are talking only about partial mobilization. In other words, only military reservists, primarily those who served in the armed forces and have specific military occupational specialities and corresponding experience will be called up.

WALSH: And behind all, the nuclear threat, falsely claiming the West had threatened Russia. And so Russia would use everything it had to defend its territorial integrity.

PUTIN (through translator): This is not a bluff, the citizens of Russia can be sure that the territorial integrity of our homeland, our independence and freedom will be ensured. I emphasize this again with all the means at our disposal. And those who tried to blackmail us with nuclear weapons should know

that the prevailing winds can turn in their direction.

WALSH: The mobilization is a huge undertaking, analysts said, when they've already failed to supply, equip and effectively deploy their regular army over the past six months will not be quick.

SERGEI SHOIGU, RUSSIA DEFENSE MINISTER (through translator): 300,000 reservists will be called up, I want to say straight away this work will not be carried out as a one off, but in a systematic planned manner, as I've already said.

[00:05:01]

WALSH: And is already palpable on Moscow streets, even if protest was as usual, muted and suppressed.

You always feel worried in moments like this, he said, because you have a wife and kids and you think about that. I would not want to leave them in case something happens.

All of this loud rhetoric to the backdrop of a U.S. bid to sustain unity at the U.N. General Assembly where President Biden hit back.

BIDEN: Putin claims he had to act because Russia was threatened. But no one threatened Russia and no one other than Russia sought conflict.

WALSH: The big question, amid all the rhetoric and threats of escalation is does this change matters on the ground?

Still, Ukraine pushes forwards despite slight Russian gains around Bakhmut. Russia still struggles to match its status as a nuclear power with real progress and strategy on the ground.

Putin's bid to appear strong, perhaps a reminder of how weak this war of choice has left him.

Nick Paton Walsh, CNN, Kramatorsk, Ukraine.

(END VIDEO CLIP)

VAUSE: Joining us now is International Reporter Robin Wright, a Distinguished Fellow at the Woodrow Wilson Center and a contributing writer for The New Yorker.

Robin, it's good to have you with us. Thanks for being here.

ROBIN WRIGHT, DISTINGUISHED FELLOW, WOODROW WILSON CENTER (on camera): Thank you.

VAUSE: So, Putin talked about the referendums or someone calling sham referendums in the Russian controlled regions of Ukraine, a troop mobilization, which has been underway by stealth in a way for a number of weeks now. He also played the nuclear card, which has been done before. The response from the E.U. leaders has been typical of most Western leaders. Here's Ursula von der Leyen, listen to this. (BEGIN VIDEO CLIP)

URSULA VON DER LEYEN, PRESIDENT, EUROPEAN COMMISSION: President Putin is showing his weakness now. Because what you see is that he tries to mobilize personnel that is less trained, less experienced, less motivated.

He wants to start sham referenda in -- on Ukrainian sovereign soil. So, I think this calls for sanctions from our part again.

(END VIDEO CLIP)

VAUSE: More sanctions from the E.U., no sanctions from India or China or South Africa at this point.

But does the argument that this is a sign of weakness makes sense? Because that's what we want to believe. Because historically, though, at every turn, Putin has escalated, why would he de-escalate now?

WRIGHT: That's a very important point. And the West wants very much to believe that Vladimir Putin is in trouble, that he is desperate and it shows how weak his forces are and how Ukraine has gained the kind of momentum that it needs to push Russia back.

The reality is that Putin is signalling he's willing to take extraordinary steps. This is the first mobilization since the Second World War. He's calling up more than twice as many troops as the number that invaded Ukraine in February, he played the nuclear card in a kind of oblique thinly veiled way, which is very troubling, because he's signaling that he's willing to take unprecedented steps.

This would convert what is a European war with a fighting isolated to Ukraine to something that would be like a Mini World War.

So, the signals from Russia are very troubling. We all know this is going to end in diplomacy, but there's no sign that there's any diplomacy anytime soon.

VAUSE: In many ways, it's still an open question where Russia will find 300,000 able bodied recruits willing to fight but that call up is underway, at least according to the Russian president. Here he is, listen to this.

(BEGIN VIDEO CLIP)

PUTIN (through translator): Mobilization will begin today, September 21st. I'm instructing the heads of the regions to provide the necessary assistance to the work of the military recruitment offices. I would like to point out that the citizens of Russia called up in accordance with the mobilization order will have the status payments and all social benefits of military personnel serving under contract.

(END VIDEO CLIP)

VAUSE: Notable that Reuters reported today, one way flights out of Russia were rocketing in price and selling out fast after Putin ordered the immediate call up of 300,000 reservists.

There's also these tough new penalties for soldiers who surrender or desert, that's now crime. And all of this, according to some reports, is because of a total collapse of morale among the Russian troops, which by all indications at this point will not be an easy fix for Putin. So, how perilous is that situation for Putin right now?

WRIGHT: Well, there's a lot at stake for Russia and for Putin's political future. But this is a country with millions of people.

Yes, thousands may be trying to leave. There have also been protests in more than 30 cities and with more than 1200 people arrested according to reports out of Russia.

But Putin may still invoke the nationalist card which can play to the heartstrings of many Russians. This is an argument he made again in many ways today, saying that the West was trying to orchestrate a war that would move into the Motherland that it was trying to overtake, Russian -- the Russian state.

[00:10:16]

So, this is where -- you know, I think we want to believe that he's in a lot of trouble. He may not be in enough trouble though to make much of a difference.

VAUSE: I wonder -- it seems like a fairly hard turn for Putin to make to go from, you know, six months he's been saying, it's not a war. It's a special military operation. Life goes on, we won't need to call up, everything is great, setbacks but not defeat.

And now, suddenly, it's like it is a war. We're having a mobilization. You know, it's like the old punch line from the Soviet days, we pretend to work, you pretend to pay us.

You know, more recently, you pretend to win in Ukraine, and we pretend to support you. Does that support those starts looking -- you know, in danger if you'd like, to start to weaken because of this?

WRIGHT: Well, I think the cost of the war are hitting home, I think that Putin has had to finally be a little bit honest about what's going on in Ukraine, and that this is a war, not a special military operation.

So, you know, he's had to kind of fess up to the realities of a war that's gone on for seven months and is facing severe setbacks.

VAUSE: And very quickly, because the stakes are so high, does that just simply raise the risks of what he is prepared to do?

WRIGHT: Absolutely. This invoking the nuclear card, at least for the second time is very worrisome. It's reckless and dangerous, according to NATO and U.S. officials. But the problem is he keeps doing it, and Putin often does what he says he's going to do.

VAUSE: Absolutely right. Robin, thank you so much for being with us. We really appreciate it.

WRIGHT: Thank you.

VAUSE: Ukraine is welcoming a new swap of more than 250 prisoners of war with Russia. The exchange included dozens of fighters from the Azovstal plant -- steel plant in Mariupol who later spoke remotely with President Zelenskyy.

They fought a grueling battle while being holed up in the plant for weeks before surrendering back in May. In return, Ukraine says 55 prisoners will be sent to Russia.

It also involves 10 international prisoners of war including America's Alex Drueke and Andy Tai Ngoc Huynh. Five citizens of Britain were also released as well as Moroccan, Croatian and Swedish national. Both captured while fighting for Ukraine.

British Prime Minister Liz Truss welcomed the release in a tweet saying the move ended months of uncertainty and suffering for the five British nationals and their families.

Former U.S. President Donald Trump's legal problems have gone from bad to worse for the $250 million lawsuit filed by New York's Attorney General claiming years of staggering fraud.

Along with Trump, the civil suit names Donald Jr., Ivanka and Eric for engaging in numerous acts of fraud and misrepresentation.

CNN's Jessica Schneider has details now reporting from Washington.

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LETITIA JAMES, NEW YORK ATTORNEY GENERAL: Claiming you have money that you do not have does not amount to the art of the deal. It's the art of the steal.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT (voice over): New York's Attorney General Letitia James announcing she is suing former President Donald Trump and his three oldest children for lying to lenders and insurers for more than a decade, fraudulently inflating the value of their properties all over the country.

JAMES: They violated several state criminal laws, including falsifying business records, issuing false financial statements, insurance fraud, and engaging in a conspiracy to commit each of these state law violations.

SCHNEIDER: James is seeking drastic remedies. Her lawsuit demands Trump and his family forfeit, the nearly quarter billion dollars they've illegally gained over the years and she's looking to shut down Trump's business dealings in New York.

JAMES: We are asking the court two among other things, permanently Barr Mr. Trump, Donald Trump Jr., Ivanka Trump, Eric Trump, who is serving as an officer or director in any corporation or similar entity registered and or licensed in New York. SCHNEIDER: New York's Attorney General filed this 200 plus page lawsuit after a three year long investigation. James also flagging what she says are possible crimes to federal investigators.

JAMES: We are referring those criminal violations that we've uncovered to the United States Attorney for the Southern District of New York and the Internal Revenue Service.

SCHNEIDER: James pointed to Trump's Fifth Avenue apartment as an example of the fraud. Trump allegedly claimed it was 30,000 square feet when it was actually 11,000. And he valued it at 327 million.

JAMES: To this date, no apartment in New York City has ever sold for close to that amount.

SCHNEIDER: James says the motive was to entice banks to loan them more money and to allow Trump and his companies to pay less in taxes.

SHAN WU, FORMER FEDERAL PROSECUTOR: Obviously, there's tax fraud going on here given the massive inflation of these values.

SCHNEIDER: Trump has rebuffed James's investigation over the last three years.

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DONALD TRUMP, FORMER PRESIDENT OF THE UNITED STATES: My company is bigger, stronger, far greater asset.

SCHNEIDER: And he lashed out on his truth social page shortly after the lawsuit was filed, saying she is a fraud who campaigned on a get Trump platform.

But James, a Democrat running for reelection this year saying Trump cannot dismiss what her office uncovered as some sort of good faith mistake.

JAMES: White collar financial crime is not a victimless crime. Everyday people cannot lie to a bank. And if they did, the government would throw the book at them. Why should this be any different?

SCHNEIDER (on camera): The New York Attorney General is also alleging Trump and his three eldest children lied more than 200 times when it came to asset valuations on statements over the course of 10 years.

Now, of course, this is a civil case that's been filed in New York State court, it would be up to other entities like the Manhattan D.A.'s office, or the U.S. Attorney's Office in New York to determine whether criminal charges should be filed.

Jessica Schneider, CNN, Washington.

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VAUSE: Joining me now from Los Angeles is CNN legal analyst and civil rights attorney Areva Martin. Areva, thanks for taking the time to be with us, appreciate it.

So, the former president believes that because many of these financial statements included a disclaimer that he's done nothing wrong. Here he is talking to Fox News.

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TRUMP: We have a disclaimer right on the front. And it basically says, you know, get your own people, you're at your own risk. This was done by management. It wasn't done by a -- it was done by management. So, don't rely on the statement that you're getting.

(END VIDEO CLIP)

VAUSE: OK, how can that be a defense?

AREVA MARTIN, CNN LEGAL ANALYST (on camera): That's not a defense, John, that is standard Donald Trump and his interpretation of the law which makes him above the law. You or I or no one else in this country can submit a false statement to a bank, to a lender, a false financial statement and then fall back on the argument. Well, you didn't bet my statement, you didn't check my statement?

No, the law requires you and that includes Donald Trump to give accurate information when you fill out financial statements, you cannot inflate your assets for the purposes of getting loans, but then deflate that same asset for the purposes of filing your federal taxes to avoid paying large amounts of taxes. You can't have it both ways.

And Letitia James has taken three years John to investigate these claims against Donald Trump and his three adults and they keep calling them children as if they're 12 years old, the three adults who worked in the business with him, and those witnesses apparently have told her that contrary to what Trump likes to say, which is to blame other people that he was given information about the true valuation of his properties and assets, and he chose to intentionally chose to inflate those values.

So, he's not going to get away with what he has always done, which is to point the finger away from him and to point it at someone else. Letitia James says the buck stops here.

VAUSE: Well, it also -- this lawsuit includes Trump's three eldest children, Trump Jr., Eric and Ivanka. They're accused of business fraud, financial gain.

Now, Trump's former Attorney General and occasional critic Bill Barr says that's not fair. And it's a blow for the credibility of the case. Here he is.

(BEGIN VIDEO CLIP)

WILLIAM BARR, FORMER ATTORNEY GENERAL: Yes, they had roles in the business. But this was his personal financial statement that was prepared by the CFO, accounting firms were involved in it. The children aren't going to know the details of that and be able --

and nor are they expected in the real world to do their own due diligence and have it, you know, reviewed independently.

(END VIDEO CLIP)

VAUSE: Did anything matter after he said yes, they had roles in the business apart from the fact he should have said they had very senior roles in the business.

MARTIN: John, that is such a ridiculous statement. We are not talking about 10 and 12 year olds, we're not even talking about Trump's youngest son Baron who's 16.

We're talking about 40 year old executive, senior level executives. If you will recall, when Donald Trump ran for president at some point, he made a big statement that he was turning over all of his business, responsibilities to his adult children, that they were going to run the business.

There are tapes and tapes and tapes video after video where Donald Trump is saying his adult children are running the business, where his adult children proudly brag about the fact that this is a family brand that they all work to protect this brand.

So, the notion that these adults are not somehow involved in this conspiracy as Letitia James called it to defraud banks and to defraud insurance is absolutely ridiculous. And again, Letitia James has made it very clear that anyone involved in the Trump Organization from his accountant to his adult children are going to be held accountable.

VAUSE: This lawsuit makes the case that Trump has violated five -- and his children, five state laws including repeated fraudulent and illegal acts, falsifying business records, falsifying financial statements, insurance fraud.

[00:20:10]

On the federal level, there's possible violations regarding false statements to financial institutions, as well as bank fraud. How much trouble are they facing?

MARTIN: These are very serious charges. And one thing we should note, not only did Letitia James make a referral to the southern district of the U.S. Attorney's Office in New York, and to the IRS, she actually outlined the cases that the statutes that she believes are violated and she provided a roadmap for those federal agencies and that state agency to file if they choose to criminal charges against Donald Trump. She did the work for these agencies to just step in, take the evidence that she has amassed, follow the roadmap that she's laid out and to pursue criminal charges again, if they choose to.

And I think it's very important to know, John that she referred this to the U.S. attorney's office for the Southern District of New York.

If you will recall, Cy Vance was at the Manhattan District Attorney's Office, there was reporting that he was working alongside with Letitia James, criminally investigating the same charges, but when the new district attorney came into office, those charges appear to have been dropped. We know prosecutors left that office.

So, it seems like Letitia James was kind of thumbing their nose at the Manhattan district attorney and said, look, you move too slowly, you didn't move quickly enough. I have filed this massive 200 plus page lawsuit, and I'm making a referral to the U.S. Attorney's Office, not the Manhattan District Attorney's office.

VAUSE: Areva, thank you for being with us. We appreciate the analysis.

MARTIN: Thanks, John.

VAUSE: When we come back, the death of a young Iranian woman after being arrested for not conforming to the strict Islamic process, but the biggest antigovernment demonstrations there in years, with women burning headscarf, cutting their hair in protest. We have more on that in a moment.

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VAUSE: For days now, the largest antigovernment protests in years have been spreading across Iran, but now the crackdown is underway.

The unrest has been building since a young woman died in custody of the so-called morality police for allegedly wearing her head covering in an improper way.

At least eight people have been reported killed in clashes with security forces. Access to the internet and social media sites has been blocked or severely restricted.

The very latest now from CNN's Jomana Karadsheh.

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JOMANA KARADSHEH, CNN CORRESPONDENT (voice over): It seems unprecedented in the Islamic Republic. A woman cuts her hair as the crowd cheers her on, chanting, Death to the dictator.

Rare images are trickling out from across Iran, where thousands have taken to the streets in daring acts of defiance, never seen before on this scale.

Women are at the forefront of demonstrations in dozens of cities, from the Kurdish northwest to the capital of Iran or even more conservative cities like Mashhad.

[00:25:09]

They are risking being jailed or even flogged for defying the country's strict Islamic dress code. But that has not stopped them. Many were removing and burning their head scarves. The protests were sparked by the death of 22-year-old Mahsa Amini while in the custody of the morality police. Authorities say she died of a heart attack, which her parents do not believe. The authorities say an autopsy is being reviewed.

But the protests have snowballed into much more than that with women chanting for life and freedom, freedoms that were taking away from them by the 1979 Islamic revolution.

Young men and women say enough is enough to decades of tyranny, questioning the very existence of the morality police, a notorious force tasked with implementing the strict dress code, accused of countless abuses and ill treatment of women. The repressive violates acts on the rise in recent months, according to the United Nations.

RAVINA SHAMDASANI, OFFICE OF HIGH COMMISSIONER FOR HUMAN RIGHTS: In recent months, the so-called morality police have expanded street patrols, subjecting women perceived to be wearing loose hijab to verbal and physical harassment and the rest.

Our office has received numerous, unverified videos of violent treatment of women, including slapping women across the face, beating them with batons and throwing them into police vans.

KARADSHEH: Iranians outside the country are sharing videos like this one on social media, in solidarity with their country men and women. Many who have fled Iran in recent years are holding onto the hope that this could be a turning point.

SHIMA BABAEI, IRANIAN WOMEN'S RIGHTS ACTIVIST (through translator): Indeed, a movement has started. And I think this is the beginning of something. Women are protesting on the streets, setting their scarves on fire and eradicating any symbols of the Iranian regime from the streets.

Iranian people clearly know that freedom will only be achieved if they can put an end to this brutal regime. This is the new era for Iran.

KARADSHEH: Authorities are cracking down on the countrywide protests. Several people have been killed or injured so far, according to a human rights group. But the streets have responded with more protests, a generation rising up for freedoms they have never had.

Jomana Karadsheh, CNN, Istanbul.

(END VIDEO CLIP)

VAUSE: Now playing a harmonica in Hong Kong could have you arrested for sedition.

The defense happened during a vigil outside the British consulate, there is a colonial era law which outlaws insulting the queen.

But the man was detained after apparently performing glory to Hong Kong. British anthem created during the pro-democracy protests, which rocked the city back in 2019. When we come back, another aggressive move by the U.S. Fed to tame inflation sending Wall Street tumbling. We'll check on the global markets, in a moment.

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VAUSE: Hello, welcome back. I'm John Vause. You're watching CNN NEWSROOM.

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The biggest gathering of world leaders on the planet is underway right now at the United Nations, and Vladimir Putin's decision to draft 300,000 troops, well, it was an attention grabber.

U.S. President Joe Biden accused the Russian president of making reckless and irresponsible threats, as well, to use nuclear weapons. And in the coming hours, the U.N. Security Council will meet to discuss how to maintain peace and security in Ukraine.

More details now from CNN's Richard Roth.

(BEGIN VIDEOTAPE)

RICHARD ROTH, CNN UNITED NATIONS CORRESPONDENT: The European Union held emergency talks Wednesday evening, following President Putin's announcement of a call-up of 300,000 soldiers and a veiled threat to use nuclear weapons.

The Security Council will hold a foreign minister-level meeting on Ukraine later today. Russian Foreign Minister Lavrov will attend, as will U.S. Secretary of State Tony Blinken. Thirteen other ministers are also expected from the other Security Council countries.

President Zelenskyy of Ukraine addressed the U.N. General Assembly on Wednesday evening. He feels President Putin is isolated.

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT: There is only one entity among all U.N. member states, who would say now, if he could interrupt my speech, that he's happy with this war, with his war. But we will not let this entity prevail over us, even though it's the largest state in the world.

ROTH: Zelenskyy urged that the U.N. take away Russia's right to veto at the Security Council. That's unlikely for now, but few here know where the war is, indeed, headed.

The director-general of the International Atomic Energy Agency told reporters that he met individually with Russian Foreign Minister Lavrov the and the Ukraine foreign minister. He says getting an agreement on the Zaporizhzhia nuclear plant is difficult, though he's hopeful.

RAFAEL GROSSI, DIRECTOR-GENERAL, INTERNATIONAL ATOMIC ENERGY AGENCY: Getting an agreement today would have been nice, but you can imagine that these are very complex issues that require perhaps a bit more than one meeting.

So -- but we are already working on the very concrete aspects that would be required to have the zone being established.

ROTH: Grossi is hoping for a demilitarized zone around the Zaporizhzhia plant, another difficult mission for a U.N. diplomat.

Richard Roth, CNN, United Nations.

(END VIDEOTAPE)

VAUSE: It came as no surprise, but was historic, nonetheless. The U.S. Federal Reserve on Wednesday announcing a third straight interest rate hike of three quarters of 1 percent.

The Fed's latest move to tame inflation send Wall Street tumbling again, Dow dropping more than 500 points. Investors fear these rate increases may last longer than anticipated.

We get more now from Richard Quest.

(BEGIN VIDEOTAPE)

RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT/ANCHOR: The market had been well warned that a three-quarter percent rate rise was on the cards. But when it arrived, it still took everybody with a bit of a shock.

After all, this is the third time in a row that the Fed has raised rates by such a large amount. And you've got to go back decades to find even one rate rise of three-quarters of a percent.

It's an indication of how worried Jerome Powell and the Fed are about inflation. And so more rate rises are on the way. The Fed is clear: they will not have any trouble with inflation.

JEROME POWELL, CHAIRMAN, U.S. FEDERAL RESERVE: My main message has not changed at all since Jackson Hole (ph). The FONC (ph) is strongly resolved to bring inflation down to 2 percent, and we will keep at it until the job is done.

QUEST: The market gave its judgment, down more than 500 points, deeply worried about what would come next. In other words, we know where rates are going. We just don't know how fast it will be.

Richard quest, CNN, AT THE New York Stock Exchange in New York.

(END VIDEOTAPE)

VAUSE: Live now to CNN's Kristie Lu Stout in Hong Kong. Let's see how the Asian markets are reacting. How are they doing with this increase in interest rates?

KRISTIE LU STOUT, CNN INTERNATIONAL CORRESPONDENT: John, interest rates are feeling that downward pressure after the U.S. Federal Reserve, as expected, announced yet another jumbo rate cut. Let's take a look at the Asian trading day, and there's a lot of red

arrows out there.

If we could bring up the dynamic chart for you, you see the Nikkei is losing about almost half of 1 percent. The Seoul KOSPI down more than 1 percent. The Shanghai Composite losing about a third of 1 percent. And here in Hong Kong, the Hang Seng is lower by 1.9 percent.

[00:35:12]

We are also monitoring U.S. futures from Asia, and if you bring up that data for you, you'll see that they all point to a lower open on Wall Street when it opens a few hours from now.

Now, on Wednesday, the Fed raised interest rates, as expected, by three-quarters of a percentage point. It's for the third consecutive time. It also used some hawkish language, signaling more rate hikes to come.

All this being done in a bid to fight inflation, which is at a 40-year high.

And the question is this. Is the U.S. Federal Reserve able to thread the needle to be able to strike that delicate balance between taming the dragon of inflation, as well as preventing a recession?

Well, I posed that question to the global market strategist at JPMorgan. Here's what she had to say.

(BEGIN VIDEO CLIP)

MARCELLA CHOW, GLOBAL MARKET STRATEGIST, JP MORGAN: Right now, we're expecting, hopefully, a soft landing with regards to recession, given still -- still relatively robust job growth, even if we actually have a recession coming along.

This will hopefully be a shallow one and suggesting the economy will pick up rather quickly afterwards and -- which will benefit both equities and bonds.

(END VIDEO CLIP)

STOUT: So a bit of optimism there. And Chow, as she believes rates will rise to as high as four to five percent next year, it will maintain that level through 2024.

And we're also watching activities of another central bank this day, the Bank of Japan, which is finishing up a two-day meeting. We're expecting comments in the hours ahead, and it is widely expected that they will maintain ultra-low interest rates, bucking the trend for hiking interests that we're seeing, not just in the U.S. but all around the world.

And it's precisely because of that policy difference between the BOJ (ph) and the U.S. Federal Reserve. We are seeing that push the yen down to its lowest level in 24 years. Back to you.

VAUSE: Wow. Those interest rates are like chemotherapy for a cancer patient, I guess. That's why you'll keep an eye on.

STOUT: Tough medicine.

VAUSE: Yes. Absolutely. Thank you, Kristie. Appreciate it.

Still to come, islands in the Caribbean slowly recovering from Hurricane Fiona as the storm barrels towards Bermuda. A live look at where the storm is headed after a short break.

(COMMERCIAL BREAK)

VAUSE: Hurricane Fiona is currently churning through the open Atlantic right now, after leaving a trail of destruction across the Caribbean earlier this week.

The storm is moving North, has strengthened to a Category 4, expected to brushed past Bermuda late Thursday into Friday. Puerto Rico is slowly coming back after recovering from Fiona after nearly -- nearly two-thirds of (UNINTELLIGIBLE), I should say, now have running water. Less than one-third, though, have electricity.

The U.S. approved a major disaster declaration for the territory on Wednesday. Meteorologist Pedram Javaheri has the very latest of where Fiona is heading next.

PEDRAM JAVAHERI, CNN METEOROLOGIST: John, you noted, this getting very close to Puerto Rico in the coming days. And you'll notice it's still a Category 4, 130 mile-per-hour winds, a little over 200 kilometers per hour.

[00:40:10]

Still a menacing storm. Very little has changed in the past 24 hours, as it remains in an area that is conducive to maintain this intensity, possibly even strengthen it a little bit beyond this and those water temperatures across where this system is going to traverse is very warm here, pushing into the 30s.

So we are talking about a Category 4 system. We know a lot's going to happen here, as far as the intensity, not only offshore, but also its impacts with Bermuda.

Notice the significant rate hikes, the contours in that deep purple shade. Those are 40- to 50-foot rate hikes over open waters.

I want to bring this -- notice how close it passes -- just about 200 or so kilometers west of Bermuda at its closest approach. But still, the significant wave heights, maybe 20-plus feet, could still impact portions of Bermuda. Storm surge threats, especially on the Western coast there of Bermuda, as early as Friday morning, also going to be the most significant.

And then beyond this, the system eventually loses some of its tropical characteristics. Impacts portions of Nova Scotia, Halifax included.

Notice, the system maintains that intensity for quite a while. Category 4, eventually down to Category 3, finally losing tropical characteristics before it approaches Canada.

Could make landfall in Canada, equivalent to a Category 1, although it will be an extra tropical system, meaning it will lose those tropical characteristics. But those winds are going to be very high.

And notice, in the past 20-plus years, only a handful of storms have made it this far North into Canada maintaining that intensity in a Category 1 or greater storm system. So lots of action in store, especially across portions of Canada. So alerts prompted across that region, as well, as this system approaches.

VAUSE: Pedram, we thank you for that. Pedram Javaheri there with all the very latest details from the weather center. Thank you.

An update now on actress Angelina Jolie, who's currently in Pakistan, trying to draw attention to the country's humanitarian crisis.

On Tuesday, Jolie toured some of the hardest-hit areas in the South. And on Wednesday, she went to Pakistan's national flood response coordination center as she spoke about the dangers of climate change.

(BEGIN VIDEO CLIP)

ANGELINA JOLIE, ACTRESS: I think this is a real wake-up call to the world about where we are at. The climate change is not only, real and it's not only coming, it's very much here. And now we're in a situation like this where it is -- the needs are so great.

And truly, every effort is either a life or death for so many people.

(END VIDEO CLIP)

VAUSE: Angelina Jolie has long been a UNICEF ambassador, and in this emergency, officials say over 1,600 children have -- have died. I'm sorry, more than 500 children have died, I should say; 1,600 adults, part of that tally, as well.

UNICEF says nearly 3 and a half million children, though, are in need of immediate lifesaving support.

I'm John Vause. I'll be back at the top of the hour with more CNN NEWSROOM. But first, WORLD SPORT starts after a very short break. See you soon.

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