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Southwest Cancels Thousands of Flights; Deadly Winter Storm Hammers the United States; No Relief for Ukraine's Hard-Hit Frontline Towns. Aired 3-4a ET

Aired December 27, 2022 - 03:00   ET

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

[03:00:00]

(COMMERCIAL BREAK)

ROSEMARY CHURCH, CNN ANCHOR: Hello and welcome to our viewers joining us here in the United States and all around the world. You are watching "CNN Newsroom," and I'm Rosemary Church. Just ahead --

(BEGIN VIDEO CLIP)

UNKNOWN (voice-over): Unfortunately, our next available seats for rebooking are 31st and beyond. Once again, our next available seats for rebooking customers at this time is on the 31st and beyond.

(END VIDEO CLIP)

CHURCH: These are the scenes playing out in airports across the U.S. as massive as massive disruptions at Southwest Airlines leave holiday travelers stranded.

Plus, frigid temperatures and paralyzing snowfall hammered parts of the U.S. this holiday weekend. We will speak to one New York official about the difficulties that remain as temperatures finally take a turn for the better.

And no relief as soldiers fighting in Ukraine's hardest hit frontline towns as President Zelenskyy warns that Russian troops will stop at nothing to gain just a little ground.

UNKNOWN (voice-over): Live from CNN Center, this is "CNN Newsroom" with Rosemary Church.

CHURCH: Thanks for joining us. It is the travel nightmare after Christmas. Thousands of flights have been canceled across the U.S. after the monster arctic storm that pummeled much of the country over the holiday.

And for Southwest Airlines in particular, it is an utter catastrophe. Right now, the flight tracking website FlightAware shows more than 2,700 total cancellations in the U.S. on Tuesday, and of those, more than 90% are Southwest flights.

The company says that it has been forced to scale back its flight schedule to get operations back on track and get crews in the right places. Southwest CEO says that it is the largest scale event he has ever seen.

Meantime, passengers are stranded at airports, struggling to get answers on when they will be able to reach their destinations. We've seen incredibly long lines at airline counters and tons of luggage piling up at baggage claims. Southwest has said that these cancellations and delays could go on for several more days, meaning it may be weekend before many passengers can even rebook. Here is more from a Southwest spokesperson.

(BEGIN VIDEO CLIP)

JAY MCVAY, SOUTHWEST SPOKESPERSON: Obviously facing some operational challenges this evening with winter storm Elliott. That has kind of moved on to include some challenges with our flight crews being stuck in locations not where they need to be along with the aircraft.

You know, at this point, we are working to accommodate our customers as best we can and offer them the most options that we can to get folks back home or to their vacation spots or holiday celebration spot at this point.

This is the main focus right now, to try to take care of our customers as quickly as we can and get them out of this line with their loved ones or somewhere where they can get some rest. It has obviously been a very long week with the storm, so that's our primary concern.

(END VIDEO CLIP)

CHURCH: The U.S. Transportation Department is also growing concerned and looking into the matter, calling the massive disruptions by Southwest unacceptable. CNN's Lucy Kafanov has more on the frustrations Southwest passengers are feeling.

(BEGIN VIDEOTAPE)

UNKNOWN: I wasn't anticipating a nightmare but it became a nightmare.

LUCY KAFANOV, CNN CORRESPONDENT (voice-over): Christmas may be over, but for thousands of passengers, the travel nightmare goes on.

UNKNOWN: They canceled our flight. And they said they can help us. So, we don't know what to do.

KAFANOV (voice-over): Southwest Airlines at the top of the list for cancellations. The airlines ticketing counter at Baltimore's BWI Airport, a zoo. Denver Airport's lines for the Southwest ticket counter even longer.

JESSICA SOKOLOWSKI, SOUTHWEST PASSENGER: We had to wait in a line that was four hours. We are still in line. Nobody is giving us any direction on what line to get in. It's a total, you know what, show here.

KAFANOV (voice-over): And for those trying to call to rebook, well, good luck getting through.

UNKNOWN: Calling Southwest, calling the airlines, they are nowhere to be found. I actually got hung up on multiple times.

UNKNOWN: The problem is that Southwest, they don't give any answer. They don't answer the phone.

UNKNOWN: There is no option to rebook anything online. I've also been on hold for five hours and 43 minutes.

KAFANOV (voice-over): Passenger Jason Fried (ph) shows us the proof. In a statement to CNN, Southwest Airlines said that it is experiencing disruptions across our network as a result of the winter storm's lingering effect on the totality of our operation.

[03:05:02]

KAFANOV: In the wake of dangerously cold temperatures and winter weather across the nation, airlines canceling thousands of flights on Monday.

MICHAEL JUSTICE, FAMILY'S FLIGHT CANCELED: They were scheduled to fly on Saturday and canceled flight after canceled flight until this morning. Now at standby, hoping they will get on to get home.

KAFANOV (voice-over): Thousands more flights delayed.

UNKNOWN: Just delay, delay, delay, rinse and repeat.

KAFANOV (voice-over): Airports across the nation, long lines, chaos, frustrated passengers, and luggage piling up.

AZIZA MUSTEFA, FLIGHT CANCELED: There is a lack of communication, there is no transparency, there is no honesty. I don't know what's going. There's no staff.

UNKNOWN (voice-over): No staff either, yeah.

MUSTEFA: It's okay there's no staff. We just want them to be honest with us, and I can just go home. But we can't go home because we don't know where our luggage is. Is it here in Atlanta? Is it in Chicago? We have no idea.

KAFANOV (voice-over): Some passengers choosing to look at the bright side.

JESSICA GRAY, FLIGHT CANCELED: It was like super stressful but, I mean, just happy that I got to see my family for Christmas and hey, I'm off this week, so I'll be good.

KAFANOV (voice-over): Others finding creative solutions for their journeys home.

JOHN MCCONVILLE, FLIGHT CANCELED: Instead of waiting on a maybe flight and paying through my Peruvian nose for a rental car, if I'm able to get one, call a friend of mine. I'm driving a car, rental cargo van in Nashville, Tennessee.

KAFANOV: Southwest Airlines issuing a statement on Monday saying -- quote -- "With consecutive days of extreme winter weather across our network behind this, continuing challenges are impacting our customers and employees in a significant way that is unacceptable." The airline adding -- quote -- "We recognize falling short and sincerely apologize." But that is cold comfort for the hundreds of passengers stranded here in Denver and across the nation.

Lucy Kafanov, CNN, Denver.

(END VIDEOTAPE)

CHURCH: And earlier, I spoke to Kathleen Bangs, former airline pilot and FlightAware spokesperson. I asked her what passengers can expect in this difficult situation.

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KATHLEEN BANGS, FORMER AIRLINE PILOT, FLIGHTAWARE SPOKESPERSON: So, it's going to be very difficult for people right now that are stranded to actually get to their destination on Southwest. They may have to just switch to another carrier and try to sort this out later.

CHURCH: That just seems unacceptable, doesn't it? Let us look at that. Why we are seeing it is mostly passengers of Southwest Airlines that are being impacted by this? What is going wrong with their company?

BANGS: It is a couple interesting things. Southwest has had a great reputation and known for really outstanding customer service. So, I'm sure that this really hurts them hard.

But we have to look at the last worst day of cancellations in 2022, the day that broke the record, until last Friday for 2022, February 3rd. Not a holiday. A lot of people don't remember. But the airlines canceled because of a weather event. They knew a major ice storm is coming across the U.S.

Airports like Dallas-Forth was shut down. Airlines canceled thousands of flights preemptively. And what happened is that people didn't get stranded. The problem with what has happened now is we also knew again that a horrific weather event was coming and it was going to be almost nationwide.

But the airlines didn't really cut too many flights. Southwest cut a few, some airlines had a few cancellations, but they tried to maintain those holiday schedules for the obvious reason. But the one thing passengers won't forgive you is if you don't get them where they want to be. So, that kind of hit them.

They also have a point-to-point network. They're not hub and spoke like America and Delta. They are more of a short haul, short medium haul. And that means basically that when those pilots leave on a given day like for Minneapolis, they go to Midway, to Kansas City, down to Houston, to Dallas, to Phoenix, switch crews, and then they are off to like Ontario for the night.

The issue with that is that it is very difficult once those crews, once those planes get out of position to rejuggle the whole system. It's a little but easier in a point and spoke, and that's a different system than how Southwest operates.

CHURCH: That is interesting because the U.S. Transportation Department says that this massive disruption is unacceptabl, which, of course, implies that it is avoidable. So, let us look at how Southwest needs to change to try to avoid this happening again.

BANGS: One of the things that Southwest has said is that they recognize that they've had some technological challenges, wspecially with what appears to be their crew scheduling system. It's probably outdated and that is going to need some work because we have pilots, we have crews, we have flight attendants ready to fly, we got airplanes. We just don't have them in the same location together. That's definitely a problem that they're going to be looking into solving.

The DOT, as you mentioned, has already has gone on board with this. The DOT just months ago launched that airline traveler consumer dashboard to try to get the airlines, you know, to give better customer service and to give passengers an outlet to find out, okay, what am I (INAUDIBLE) if I'm stranded someplace exactly? So, I think we will look to see more government involvement in getting this issue straightened out.

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[03:10:00]

CHURCH: Our thanks again to Kathleen Bangs.

Well, the severe winter weather walloping the U.S. has now killed at least 49 people nationwide. More than half of those deaths took place in Erie County, New York, which is bearing the brunt of the devastation and is now being called ground zero. Some parts of western New York remained buried under more than a meter of snow. That is more than three feet.

A few hours ago, the U.S. president issued an emergency declaration for the state, which frees up federal resources for disaster relief. And other counties that escape the worst of the storm are sending staff and supplies to Erie.

Well, Buffalo is the city hardest hit by the blizzard and roads there remained treacherous. Last hour, I asked a Buffalo council member about the situation on the ground. Take a listen.

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MITCH NOWAKOWSKI, COUNCIL MEMBER, BUFFALO, NEW YORK: Yes, the city of Buffalo experienced power outages of 30,000 residents, many of whom I represent. So far, a total of 27 fatalities. The number is growing. Right now, I am in my house in downtown Buffalo, where just a few hours ago, neighbors found a body under a snow pile just a block from my own house. It was truly a horrific scene.

CHURCH: Yeah, that is just horrifying. And what additional resources does your city need at this particular point?

NOWAKOWSKI: Really at this time, we need folks to stay off the road so that all of the equipment in the city of Buffalo can come and start cleaning up the snow, make sure that we are not just doing primary and secondary streets but also the side streets so we get to residents.

I want folks to really know that during a storm, the most vulnerable often suffer the most. These are folks that need kidney dialysis, senior citizens, those that are living with a disability, and those that need lifesaving treatment every single day. We've also had instances where people have had to give birth over the phone, help with 9/11 operators. You know, that is really a scary thing, and I want to make sure people know that.

You know, I even have friends that are living with a disability, that have not had home health care aides since Thursday. They rely on these services just for their safety and for their personal care.

(END VIDEOTAPE)

CHURCH: And Buffalo will stay under a winter weather advisory for another 11 hours or so.

Still to come, a difficult situation on the front lines. Ukraine's president gives an update on what his troops are facing in the Donbas. Back with that and more in just a moment.

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[03:15:00]

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CHURCH: Ukrainian President Volodymyr Zelenskyy is describing a difficult situation in the Donbas as his forces are locked in fierce battles with Russian troops. Among the city seeing ongoing fighting is Bakhmut in the Donetsk region. Mr. Zelenskyy says that Ukrainians must be prepared for any possible Russian attacks and had this update on the front lines.

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VOLODYMYR ZELENSKYY, PRESIDENT OF UKRAINE (through translator): Bakhmut, Kreminna and other areas in Donbas that require maximum strength and concentration now. The situation there is difficult, painful. The occupants are spending all the resources available to them, and these are significant resources to squeeze out at least some progress.

(END VIDEO CLIP)

CHURCH: Meantime, Ukraine's security service says that it has neutralized more than 4,500 cyberattacks this year. One official says that energy and military facilities and government databases are among the typical targets. In St. Petersburg, Russia, President Vladimir Putin is hosting the second day of an informal summit of the post-Soviet Commonwealth of Independent States. The group includes Belarusian President Alexander Lukashenko who Mr. Putin mess with in Minsk more than a week ago.

CNN's Clare Sebastian is tracking developments. She joins us now live from London. Good morning to you, Clare. So, what is expected to come out of this informal summit?

CLARE SEBASTIAN, CNN INTERNATIONAL CORRESPONDENT: On one hand, Rosemary, this is about Russia proving to the world that it is not isolated on the international stage, that it still has this very clear spirit (ph) of influence in the post-Soviet space in central Asia, and that it has alliances that serve as a counterpart to the western alliances that it has essentially lost as a result of this war in Ukraine.

And on the other hand, this is about this specific region. Putin has given this region a lot of attention over the past year. He has visited all five of the central Asian countries, present at this meeting since the start of the war in Ukraine, and hasn't really done much traveling since the start of the war in Ukraine. He was pretty careful about leaving the country after COVID.

That is significant. Talks are about economic ties between the two countries. Putin said trade is up some 6% since between January and October this year compared to last year. And security as well. He admitted that there have been challenges in terms of security on the world stage, explicit mention of Ukraine.

He did also admit there what he called disagreements between the countries that are a part of this grouping. I think the most significant of which is the clashes that broke out in September between Azerbaijan and Armenia.

Russia is presenting itself as the sort of broker, the peacekeeper, the central member of this group. That is why you see Putin standing in the middle of that photo. But that role has been tested as a result of the war in Ukraine. So, clearly, Russia is trying to hang on to its influence in this arena, Rosemary.

CHURCH: All right. Clare Sebastian, many thanks for joining us live there.

[03:19:57]

CHURCH: And joining us now from Ukraine is Alexander Rodnyansky, economic advisor to President Volodymyr Zelenskyy and associate professor of economics at the University of Cambridge. Good to have you with us.

ALEXANDER RODNYANSKY, ECONOMIC ADVISOR TO PRESIDENT VOLODYMYR ZELENSKYY, ASSOCIATE PROFESSOR OF ECONOMICS AT UNIVERSITY OF CAMBRIDGE: Thank you for having me.

CHURCH: So, Russian President Putin says that he is ready to negotiate with everyone involved in the war, but one of President Zelenskyy's advisers says Russia only wants to avoid responsibility. What's your reaction and why is Putin saying this now?

RODNYANSKY: Well, yes, absolutely, I mean, we can't trust any word that they're saying. Obviously, this is a strategy to deflect, to buy more time. The blitzkrieg (ph) has gone terribly wrong for them and they know that. They need more time in order to regroup, rebuild their troops, and that's exactly what they're doing.

In the meantime, they don't want more support for Ukraine. They don't want us to get all the possible weapons that we possibly could, more attack weapons, more tanks, more armored vehicles, more air defense systems. They don't want that to happen.

In order for that to be less likely, they need to signal to the world that somehow peace could be around the corner if just Ukraine wasn't the culprit in their view. So, that's obviously just the usual deflection and trickery that they're so good at, unfortunately, and we must not fall into that trap.

CHURCH: And Ukraine reports that Russia struck Kherson more than 70 times on Saturday, killing at least 16 people. What are you able to tell us about the situation in Kherson right now?

RODNYANSKY: Yes, absolutely. Ever since we liberated Kherson a few months ago, we basically saw that, you know, the front lines have shifted and what used to be happening at Mykolaiv all the time in terms of the bombardments, the destruction day-to-day, is now happening in Kherson.

The other reason why the Russians are doing it, it is obviously just the usual terrorist tactics to show to the population that life on the Russian occupation is somehow bitter, that now it's only constant shelling and terrorism, no water and no energy supplies. Remember, they blew up every piece of energy infrastructure when they left, and that's going to take months to rebuild.

So, they really want to punish the population on one side, and on the other side, they want to show them, you know, in fact, life under Russia is better than under Ukraine.

CHURCH: And we've seen that Russia has been hitting Ukraine's infrastructure relentlessly, knocking out power and water, making winter intolerable for many. How are most Ukrainians coping with the bitter winter and, of course, this ongoing war?

RODNYANSKY: Well, that's very hard, as you say. So, Russia is constantly shelling our energy infrastructure, our own system, our energy supplies, our water supplies, our heating supplies, and we have been on a downward trend, to be honest. They have been successful in crippling our economy to a large extent.

We expected, you know, the shrinkage of GDP, the collapse in GDP to be about 35% before this started in October, on the 10th of October. Ever since then, we've been on a downward spiral. So, now, we are probably expecting somewhere around 50% GDP decline, and that's just because of these attacks.

And as you say, the electricity supply has not been restored fully before every subsequent attack. So, we're living with constant outages. We're living with some water supply shortages. Many people also no heating. So, it's very tough. It takes a steep toll on the economy and generally on our day-to-day life.

CHURCH: Yeah. And of course, the world has witnessed the Ukrainian people, just extraordinary, the way they have pushed back and the way they are dealing with this war and, of course, this attack on their infrastructure.

But at the same time, Ukraine is calling for Russia to be expelled from the United Nations. But that, of course, is a very complicated process. What do you think will likely happen with this?

RODNYANSKY: Yes, absolutely. I mean, it's not something that happens overnight. It's a complicated process, as you say. But it wouldn't be without precedent. I mean, you also saw -- you would need a super majority for that. You would need the general assembly to come together, two-thirds to vote on it, plus one vote, I think.

And also, I mean, it's not without precedent. The republic of China lost its seat in 1971 and it was replaced by the People's Republic of China. So, you know, you could think about analogous situations where something like this would happen. It's important for us because we're trying obviously to isolate Russia. We think that's the right course of action.

Russia is a pariah state these days, a terrorist state. It needs to be classified as a terrorist state globally. We need to make sure that the price it pays it as steep as possible both economically, politically, and militarily. That's what we're working on.

CHURCH: How much longer do you think this war will go on for, and how do you see it ending?

RODNYANSKY: Well, that's the big question. I mean, we'd like to see it ending sooner rather than later. But in all likelihood, given the fact that we're still missing some support that we possibly could be having in terms of the tanks, the armored vehicles, the quantity of modern equipment, and also given the fact that Russia is still economically viable, under strain but still functioning, this is probably going to drag on.

[03:25:05]

RODNYANSKY: I mean, you see that the Russian leader doesn't face any political internal resistance to his courses, to his, you know, foreign course of action, his war in Ukraine. He doesn't face any pressure, and that's the big problem.

We need to destabilize Russia from within. And the sooner that happens, the sooner they're going to focus on domestic affairs rather than foreign affairs as they see fit and the sooner we will see an ending to this war. With this regime, there's not going to be an end. The regime is just going to continue, plow on, and they will adjust their tactics as they're doing right now.

CHURCH: Alexander Rodnyansky, thank you so much for joining us. Appreciate it.

RODNYANSKY: Thank you.

CHURCH: Still to come, CNN's Matthew Chance looks back on ten months of war, including his close encounter with some of the first Russian troops to invade Ukraine.

And thousands of migrants are waiting at the U.S.-Mexico border, hoping a Trump era immigration restriction will be lifted soon. More on what this could mean for border cities. Back in just a moment.

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CHURCH: Welcome back, everyone. The week after Christmas got off to a bad start for many across the United States. Winter weather sweeping parts of the country caused massive flight delays and cancellations, stranding thousands of passengers.

Southwest Airlines logged the most canceled flights on Monday, more than 2,900 in all. Travelers report waiting nearly 10 hours on hold to speak with customer service in some instances. Southwest has already canceled more than 2,400 of its flights for Tuesday, more than 60% of its scheduled flights.

[03:30:00]

At least 49 people have now died from these severe winter storm that has hammered the U.S. Most of those deaths were in the western part of New York State which is still reeling from the disaster.

Some areas remain buried under more than a meter of snow that's over three feet. A few hours ago, the U.S. president approved an emergency declaration for the state allowing federal resources to help with disaster relief.

Well, despite the bitter cold, the lines of migrants are growing longer at the U.S.-Mexico border with a Trump-era immigration policy known as Title 42 still in limbo. The policy which allows border officials to quickly expel migrants to slow the spread of COVID was due to expire last week. But the Supreme Court's chief justice stepped in to put the its termination on hold.

CNN's Camila Bernal spoke with one migrant family.

(BEGIN VIDEO CLIP)

CAMILA BERNAL, CNN CORRESPONDENT (voice-over): A dream come true in the form of a hula hoop. Toys their parents say they would not be able to afford their need of Venezuela. An opportunity for his children, says 30-year-old Elvin Carascel (ph) who left his country more than three months ago with his partner and four children. In November, they made it to the U.S. and turned themselves in to immigration authorities. They sent us back, he said, and because they're not legally married,

the two got separated. And after about a week in a detention center, they ended up into different cities in Mexico.

Elvin's (ph) partner, Caroline (ph), says she was told they were being sent back to Mexico because of Title 42 which allows border agents to immediately expel migrants, citing COVID-19 concerns. And this is what they say led them to an illegal crossing 20 days later.

I wanted to cross legally, says Caroline (ph). But as a family, they felt they had no other option. It's a desperation felt by many here. And as a result, they end up on the streets during a cold front in El Paso. The city accommodates those who have documentation, taking more than 400 people into this makeshift shelter and its convention center over the holiday weekend. Others ending up in Washington, D.C., outside of Vice President Kamala Harris' residence.

AMY FISCHER, MIGRANT SOLIDARITY MUTUAL AID NETWORK: The majority of them are planning to, you know, stay in D.C. or head up to New York.

BERNAL (voice-over): Texas Governor Greg Abbott has been busing migrants to northern states since April. These migrants were bussed from Texas to D.C. on Christmas Eve. Some wearing only a t-shirt in 18-degree weather. For Elvin (ph) and Caroline (ph), the final destination is Chicago. They say they want to apply for refugee status, find work, and provide for their four children.

BERNAL (on camera): And every single one of these migrants has a similar story. I've been speaking to them over the last couple of days, and most of them tell me that they are waiting to be able to afford a bus ticket to get to their final destination. In the meantime, many of them are out here and preparing as the sun sets, to sleep out on the streets because the shelters are at capacity. Camila Bernal, CNN, El Paso, Texas.

CHURCH: U.S. Republican George Santos admits he lied about multiple parts of his resume during his campaign to become a lawmaker. The congressman-elect from New York confirmed claims that he lied about attending university and his work experience thus published in "The New York Times." Republican leadership has been noticeably quiet since the revelations were made. Santos says that even though he embellished his credentials, quote, "we do stupid things in life" he said.

(BEGIN VIDEO CLIP)

CONGRESSMAN-ELECT GEORGE SANTOS (R-NY): I'm not a fraud. I'm not a criminal who defrauded the entire country and made up this fictional character and ran for Congress. I've been around a long time. I mean, a lot of people know me. They know who I am. They've done business dealings with me. And I'm not going to make excuses for this, but a lot of people overstate in their resumes or twist a little bit or ingratiate themselves. I'm not saying I'm not guilty of that.

(END VIDEO CLIP)

CHURCH: Well, we are about six hours away from the opening bell on Wall Street. Investors are hoping to see the markets rise after the long Christmas holiday weekend. Looking at futures there, which is encouraging. The Dow Futures up 0.60 percent. And the Nasdaq Futures up nearly 1 percent there.

[03:35:01]

European markets are up there again. That's encouraging as well. Paris CAC up more than 1 percent. Meantime, it wasn't an easy day for central banks around the world. In the U.S. alone, the Fed raised rates seven times to combat soaring inflation. CNN's Richard Quest and Rahel Solomon (ph) -- Rachel Solomon I should say, look at whether those efforts will pay off in the year ahead.

(BEGIN VIDEOTAPE)

RICHARD QUEST, CNN ANCHOR: Rahel.

RAHEL SOLOMON, CNN CORRESPONDENT: Richard.

QUEST: Look at our delightful Christmas tree. And I see markets, recession, higher interest rates, all of the things you've been talking to us about over the course of the year. What's been going on?

SOLOMON: It has been an eventful year, right? I mean, if you think about where we're coming from, it was just March, not even a full year ago where the Fed started to raise interest rates. And they have done so much in a short period of time. Now, we're sort of in a wait and see. Not yet, but soon, keep them higher for longer and let's just see how this plays out. And I think the big question heading into 2023 is how much pain, how much damage will the Fed potentially have caused?

QUEST: When I heard Chair Powell in the December meeting talking about 425 basis points of interest rate hike, four and a quarter percent and you look at the graph. I mean, (inaudible). I mean, it's not even (inaudible). It's straight up. I -- it is an economic conundrum that the economy hasn't just gone into full scale recession and reverse. People don't understand.

SOLOMON: It has been a dizzying pace, right?

QUEST: Right.

SOLOMON: I mean, because when you look at previous rate hike cycles, you see a sort of a gradual 25 basis points. This was not that. And so, I think the question as Powell has pointed to, there is no painless way to do this. So, I think the question is how much pain will that sort of dizzying pace of rate hikes ultimately cause? And I think that's the big question next year.

QUEST: Why hasn't the economy slowed faster?

SOLOMON: There is so much happening right now that is a result of the pandemic. Think about how strong the labor market is, right? I mean, think about how much excess savings people have because of a few things. Stimulus packages, not just one, but two that really infused a lot of cash into the market. And then two, people were sitting at home for about a year with

nowhere to spend their money, right? I mean, how many decorative pillows can you buy? And so, people have this buffer that should have been powering consumer spending, but we're starting to see that change.

QUEST: Right, because the point is you've had these very fast, these fast increase of interest rates because of these other factors. As these other factors start to (inaudible) -- your left with just high interest rates.

SOLOMON: Yeah, exactly. And it's interesting because I think at this point in the inflation cycle, you're no longer seeing goods inflation, right? You're no longer seeing supply side inflation. You're starting to see a lot of wage inflation. You're starting to see a lot of service side inflation.

And so now the question is, well, how much damage does the Fed cause to the demand side of the equation? I think investors heading into the December meeting were hoping finally for some (inaudible) language. Finally hoping to hear Powell say, all right, you know, we're going to take a wait and see approach and they didn't get it, right?

And so, I think even heading into 2023, it will still sort of be investors holding their breath waiting to finally hear the words from J. Powell.

QUEST: What are you looking forward to next year?

SOLOMON: I am looking forward to a return to cooler inflation.

QUEST: I do.

SOLOMON: Personally, or professionally?

QUEST: Yes.

SOLOMON: I mean, personally too. I mean, look, I am a consumer as well. I mean, I --

QUEST: We don't -- you don't have time to consume. We (inaudible) too busy.

SOLOMON: I would like to be paying less rent in New York City. I would like to be paying a lot less for practically everything. So, personally and professionally, I am looking forward to less inflation. And I'm also looking forward to sitting in your chair while you're in vacation because that's been a great part of 2022 for me.

QUEST: As anybody knows, I don't take vacations very often. So, I look forward to --

SOLOMON: Hold my breath.

QUEST: Thank you very much.

(END VIDEOTAPE)

CHURCH: Great discussion there. Well, just ahead, CNN's Matthew Chance has been covering Russia's invasion from Ukraine since it began. He reflects on nearly a year of war. That's coming up.

(COMMERCIAL BREAK)

[03:40:00]

CHURCH: In Ukraine, President Volodymyr Zelenskyy is describing a difficult and painful situation on the front lines, as Ukrainian forces battle Russian troops in the Donbas. Mr. Zelenskyy specifically mentioned the city of Bakhmut, which has been the scene of fierce fighting. He's also urging all Ukrainians to stay vigilant and be prepared for any possible Russian attacks or provocations.

CNN's Matthew Chance has been covering Russia's war in Ukraine since it began. And he's got the footage to show it. He looks back on his experiences in Europe's biggest conflict since World War II.

(BEGIN VIDEOTAPE)

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN SENIOR INTERNTATIONAL CORRESPONDENT: When the invasion first began, I was standing on top of the roof of a hotel in the center of Kyiv, the Ukrainian capital, basically on television, having a conversation with a bunch of colleagues about how it was unlikely that Vladimir Putin even though he had built up tens of thousands of forces on the borders of Ukraine to the east, how unlikely it was that he was going to take that step, cross the Rubicon and launch a full scale invasion.

(BEGIN VIDEO CLIP)

CHANCE: It's on the hands of the Ukrainians who resist. Oh, I tell you what, I just heard a big bang right here behind me.

(END VIDEO CLIP)

CHANCE: And it was a really shocking experience because, you know, not only was I having to report on the bombardment of Kyiv, but I also had to, you know, radically recalculate what was going on, what was happening in this country I've been covering for so many years.

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CHANCE: Oh, there is another one. I got a flak jacket right here. Let me just get it -- get it on.

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CHANCE: Those first hours after the invasion were pretty frenetic. We didn't know what was really going on. There were all sorts of reports about Russian paratroopers moving into positions around the city. There was one particularly worrying report that airborne Russian special forces had moved into an airbase north of the Ukrainian capital, in an area called Gostomel. Gostomel, it was the Antonov airbase.

(BEGIN VIDEO CLIP)

CHANCE: These troops, you can see over here, they are Russian airborne forces.

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CHANCE: I started chatting to that commander. And in the conversation, I said to him, so, you know, look, give me an idea of what we are seeing here. Where are the Russians, I said.

[03:45:02]

And he said to me, you know, what do you mean. He looked really confused. He said, what do you mean where the Russians?

And I said, well, we're going to go, okay, we'll be live in a minute on CNN, you know, I want to tell people where the Russian forces have got to. And he looks at me and he said, we are the Russians. We are the Russians. And at that point, we suddenly realized that we had come face to face, we've crossed the front lines inadvertently.

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CHANCE: And so, it just shows us now for the first time just how close Russian forces have got towards the center of the Ukrainian capital.

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CHANCE: I think what was most amazing, most surprising, I suppose, about those first few days was the level of resistance that we saw and that we witnessed by ordinary Ukrainians, as well as the Ukrainian military of course. But we saw ordinary Ukrainian people pick up weapons, defend their streets, their buildings, their yards.

(BEGIN VIDEO CLIP)

UNKNOWN: I didn't think I would join this unit just two days ago. I thought that, you know, I don't know how to handle guns.

(END VIDEO CLIP)

CHANCE: And I remember looking down and they had a crate full of petrol bombs. You know, bottles with full of gasoline with rags in the top that they were going to throw at Russian forces as they came. And I asked one of the guys there. I said, did you make these? They're like, no. We didn't make them. It's the old women in the apartment blocks that are making them and then delivering them to us.

And it just really, you know, ran home, what a multi-layered sort of defense that the Russians were confronting. If they thought they were going to walk into the Ukrainian capital and take it over without a fight, I mean, what a massive miscalculation that was.

You know, within a couple of days of the invasion, we travelled to just a short distance from the capital. A bridge where there had been a battle just an hour or two before we got there.

(BEGIN VIDEO CLIP)

CHANCE: Right within the past few hours there has been a ferocious battle here on the outskirts of Kyiv. And this is one of those Russian Soviet-era vehicles which is completely burned out. You can see that this is a bridge actually, it's an access point to the northwest of Kyiv, the Ukrainian capital. And the Russian column that has come down here has been absolutely hammered.

(END VIDEO CLIP)

CHANCE: So, that was a very, very disturbing moment in the conflict. But it was also very profound in the sense that it just showed that Russia's calculation of sending a light armored columns into Ukraine to take the capital, to decapitate the Ukrainian government was not working. And it was not just not working, but it was devastating to the Russian armed forces.

I think one of the most incredible aspects of this conflict so far was been the dramatic transformation of Volodymyr Zelenskyy, the Ukrainian president from an actor and comedian to politician to president turned, you know, iconic world leader. I managed to speak to him. I was one of the first journalist to speak to him in his bunker in central Kyiv.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, PRESIDENT OF UKRAINE (through translation): And it's very important for people in the United States to understand that despite the fact that the war is taking precise in Ukraine, it's essentially for values in life, for democracy, for freedom. Therefore, this war is for all the world. And that message should be sent far and wide. From Ukraine to people in the United States so they understand what it is like for us here, what we are fighting for, and why support for Ukraine matters.

(END VIDEO CLIP)

CHANCE: And it's incredible that Zelenskyy, from very early on, knew that he had to make this war much broader in its impacts. It wasn't just, it couldn't just be a war that Ukraine was fighting. It had to be a war that the rest of the world, at least the rest of the west was invested in.

I think 2022 will be remembered as the year that Russia hold itself into the abyss, or was held into the abyss by Vladimir Putin and his extraordinary war in Ukraine. Not only is the country facing a potentially devastating military defeat with tens of thousands of dead if not more, but also, it's facing economic catastrophe.

(END VIDEOTAPE) CHURCH: Matthew Chance there. Well, still to come. With energy cost soaring in the United Kingdom, some people are turning to warm spaces to cope with high power bills. We'll explain how they work.

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[03:50:00]

CHURCH: Welcome back everyone. Well, as prices soar and temperatures drop, some in the U.K. are turning to warm spaces this winter. These are community centers that offer a warm place for people struggling to pay high energy bills. CNN's Anna Stewart has more.

ANNA STEWART, CNN CORRESPONDENT (voice-over): A hot drink, somewhere to sit and chat. The Oasis Center in London is one of thousands of organizations across the U.K. now running warm spaces for those struggling to pay their energy bills.

STEVE CHALKE, FOUNDER, OASIS TRUST: Being warm helps the person relax. The more relaxed they are, then the more logically they can think about all their other worries and stresses. There are so many other people that are cold because given the choice between being warm and eating, you've got to eat and you've got to feed your family. What's happening this year is that more and more people are being caught into that trap.

STEWART (on camera): Some people call these warm banks, but you don't use that term.

CHALKE: We think that's really important because it destigmatizes all of this.

[03:54:58]

Once you run in a warm bank, if I come into your warm bank, I'm admitted that I cannot heat my house. But if you're running the living room, as we call it, at the Oasis Center, well, actually you might be a millionaire.

STEWART (voice-over): Charity (ph), National Energy Action, predicts over 8 million U.K. households will be in fuel poverty by April. Almost double the number since last year despite the government spending billions to subsidize rising energy bills.

CHARLOTTE HILTON, OASIS TRUST EMPLOYEE: I've spent over 100 pounds in a few weeks on gas alone.

STEWART (voice-over): Mom of four, Charlotte Hilton (ph), works at the center but also uses its services to help support her family.

(On camera): Do you think it will come a point where you won't be able to meet all of your bills?

CHARLOTTE: Yes. Yes, there will be. It will become a point because everything is going up but wages, benefits, all of those things. And it's not just affecting, obviously, lower class people. It's affecting everybody.

UNKNOWN: We thought, what about if the health service just can prescribe people a warm home?

STEWART (voice-over): The National Health Service is so worried about the impact of the cold on people's health, its testing paying for some of the most vulnerable heating.

ROSE CHARD, FAIR FUTURES PROGRAMME LEAD, ENERGY SYSTEMS CATAPULT: So, there will be 1,000 homes helping this winter as part of this winter's trial. And there will be people at risk of being admitted during the winter because they live in a cold home.

STEWART (voice-over): It's a worrying new reality for so many. And the message here is that those who need help mustn't be afraid to ask for it.

CHALKE: People are scared of community. They are scared of being judged by others. I won't go to that warm bank in that church. I won't go along to these events, wherever it is because I'll be judged. Venture out. The world is full of wonderful people. You'll meet friends.

STEWART (voice-over): Anna Stewart, CNN, London.

(END VIDEOTAPE)

CHURCH: And thanks so much for your company. I'm Rosemary Church. Have yourselves a wonderful day. "CNN Newsroom" continues with Bianca Nobilo, next.

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